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Pfizer (PFE) to Buy Arena, Boost Immuno-Inflammatory Pipeline
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Pfizer (PFE - Free Report) has signed a definitive agreement with Arena Pharmaceuticals to acquire the latter for $100 per share or an aggregate equity value of approximately $6.7 billion. Pfizer plans to complete the deal in an all-cash transaction.
The acquisition deal has been unanimously approved by the boards of directors of both companies. However, the companies did not provide any timeline for the closure of the deal, which is subject to customary closing conditions, including approval from Arena’s shareholders and regulatory authorities.
Pfizer will add a promising late-stage candidate, etrasimod, to its pipeline following the completion of the acquisition of Arena. The candidate is being evaluated in multiple clinical stages for immuno-inflammatory indications.
Two pivotal phase III studies are evaluating etrasimod for treating ulcerative colitis (“UC”). Top-line data from both the studies are expected in first-quarter 2022. The successful completion of the study will lead to the potential approval of the candidate as a treatment for UC.
Apart from UC, etrasimod is also being developed as a treatment for atopic dermatitis (“AD”), eosinophilic esophagitis, Crohn’s disease and alopecia areata. A late-stage study will start soon to evaluate it in AD patients while mid-stage studies are evaluating it in the rest of the indications.
Arena also has two other mid-stage candidates — APD418 and temanogrel — in its pipeline. These two candidates are being developed as treatments for cardiovascular disorders.
Arena shares surged 80.4% on Dec 12, following the announcement of the deal. Pfizer offered a premium of 100% to the closing price of Arena’s shares as of Friday.
Shares of Pfizer gained 4.6% on Dec 12. In fact, Pfizer’s shares have surged 50% so far this year compared with the industry’s increase of 14.7%.
Image Source: Zacks Investment Research
We note that Pfizer’s COVID-19 vaccine has boosted its revenues significantly. The vaccine is anticipated to bring sales of approximately $36 billion in 2021. This has helped Pfizer to boost its cash resources significantly during the year.
Pfizer had nearly $30 billion in cash resources as of September-end. The company is now utilizing this resource to boost its pipeline. Pfizer acquired Trillium Therapeutics earlier this year in an all-cash deal worth $2.26 billion, which boosted its pipeline of blood cancer therapies.
The addition of etrasimod will help Pfizer develop a new drug with a different mechanism of action than its currently approved drugs for inflammatory indications. The company’s key immuno-inflammatory drug, Xeljanz, faced a regulatory setback earlier this year as the FDA asked to add warnings about an increased risk of serious heart-related events, cancer, blood clots, and even death to the drug’s label.
Earnings per share estimates for Repligen have moved north from $2.76 to $2.90 for 2021 and from $3.03 to $3.21 for 2022 in the past 60 days.
Repligen delivered an earnings surprise of 49.21%, on average, in the last four quarters. RGEN’s shares are up 35% so far this year.
Estimates for 2021 have narrowed from a loss of $7.27 to $4.99 for Sarepta in the past 60 days. Estimates for Sarepta’s 2022 bottom line have changed from a loss per share of $4.88 to earnings per share of $3.61 in the past 60 days.
Sarepta delivered an earnings surprise of 11.06%, on average, in the last four quarters.
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Pfizer (PFE) to Buy Arena, Boost Immuno-Inflammatory Pipeline
Pfizer (PFE - Free Report) has signed a definitive agreement with Arena Pharmaceuticals to acquire the latter for $100 per share or an aggregate equity value of approximately $6.7 billion. Pfizer plans to complete the deal in an all-cash transaction.
The acquisition deal has been unanimously approved by the boards of directors of both companies. However, the companies did not provide any timeline for the closure of the deal, which is subject to customary closing conditions, including approval from Arena’s shareholders and regulatory authorities.
Pfizer will add a promising late-stage candidate, etrasimod, to its pipeline following the completion of the acquisition of Arena. The candidate is being evaluated in multiple clinical stages for immuno-inflammatory indications.
Two pivotal phase III studies are evaluating etrasimod for treating ulcerative colitis (“UC”). Top-line data from both the studies are expected in first-quarter 2022. The successful completion of the study will lead to the potential approval of the candidate as a treatment for UC.
Apart from UC, etrasimod is also being developed as a treatment for atopic dermatitis (“AD”), eosinophilic esophagitis, Crohn’s disease and alopecia areata. A late-stage study will start soon to evaluate it in AD patients while mid-stage studies are evaluating it in the rest of the indications.
Arena also has two other mid-stage candidates — APD418 and temanogrel — in its pipeline. These two candidates are being developed as treatments for cardiovascular disorders.
Arena shares surged 80.4% on Dec 12, following the announcement of the deal. Pfizer offered a premium of 100% to the closing price of Arena’s shares as of Friday.
Shares of Pfizer gained 4.6% on Dec 12. In fact, Pfizer’s shares have surged 50% so far this year compared with the industry’s increase of 14.7%.
We note that Pfizer’s COVID-19 vaccine has boosted its revenues significantly. The vaccine is anticipated to bring sales of approximately $36 billion in 2021. This has helped Pfizer to boost its cash resources significantly during the year.
Pfizer had nearly $30 billion in cash resources as of September-end. The company is now utilizing this resource to boost its pipeline. Pfizer acquired Trillium Therapeutics earlier this year in an all-cash deal worth $2.26 billion, which boosted its pipeline of blood cancer therapies.
The addition of etrasimod will help Pfizer develop a new drug with a different mechanism of action than its currently approved drugs for inflammatory indications. The company’s key immuno-inflammatory drug, Xeljanz, faced a regulatory setback earlier this year as the FDA asked to add warnings about an increased risk of serious heart-related events, cancer, blood clots, and even death to the drug’s label.
Pfizer Inc. Price
Pfizer Inc. price | Pfizer Inc. Quote
Zacks Rank & Stocks to Consider
Pfizer currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks from the drug sector include Repligen (RGEN - Free Report) and Sarepta Therapeutics (SRPT - Free Report) , both carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings per share estimates for Repligen have moved north from $2.76 to $2.90 for 2021 and from $3.03 to $3.21 for 2022 in the past 60 days.
Repligen delivered an earnings surprise of 49.21%, on average, in the last four quarters. RGEN’s shares are up 35% so far this year.
Estimates for 2021 have narrowed from a loss of $7.27 to $4.99 for Sarepta in the past 60 days. Estimates for Sarepta’s 2022 bottom line have changed from a loss per share of $4.88 to earnings per share of $3.61 in the past 60 days.
Sarepta delivered an earnings surprise of 11.06%, on average, in the last four quarters.