Puma Biotechnology ($PBYI) investors have been giddy about their prized biotech kitty. The cancer drug developer's shares have risen more than 50% in 2013 as the company begins late-stage development of its lead drug neratinib for patients with metastatic HER2-positive breast cancer. And as Bloomberg reports, the $836 million value of Puma prices the development-stage biotech as a prime target for a buyout.
Puma CEO Alan Auerbach has raised his biotech cub with some of the same people and strategy as his previous company Cougar Biotechnology, which Johnson & Johnson ($JNJ) bought in 2009 to gain title to the prostate drug Zytiga in a deal valued at about $1 billion. The deal happened during late-stage development of Zytiga, ahead of the FDA approval of the blockbuster hopeful in 2011.
"Cougar is a good guidepost because you have the same players involved," Les Funtleyder, an analyst for the investment fund Poliwogg, told the news service. "People's natural inclination when the management has sold a company before is to assume that they're going to do it again."
Investors love a good M&A story, and Auerbach says that multiple options are on the table as he seeks the best outcome for shareholders, including a sale of the company. For now, however, his company has been focused on the aggressive Phase III plan for neratinib, which Puma licensed from Pfizer ($PFE) in 2011. Both the FDA and EMA have signed off on the late-stage development strategy to test neratinib in combination with Xeloda head-to-head with GlaxoSmithKline's ($GSK) Tykerb plus Xeloda in patients with HER2-positive breast cancer that has spread after at least two prior treatments.
With enrollment expected to kick off this month or in April, the Phase III trial seeks data on progression-free survival and overall survival. Regulators have agreed to consider the PFS data from Puma for accelerated approvals. Bloomberg reports that data from the 600-patient study could come in 2015.
The M&A gossip is likely to last as long as Puma's neratinib remains a viable contender. Analysts listed some of the usual suspects--all deep-pocketed pharma players in oncology like Bristol-Myers Squibb ($BMY), AstraZeneca ($AZN) and GlaxoSmithKline--that could pounce to buy Puma. And Bloomberg highlighted AZ chief Pascal Soriot's vocal interest in M&A as part of his plans to put the weary giant on a new path toward prosperity.
- check out the Bloomberg article
Special Report: Buyout Buzz: The most frequently cited takeover targets in biotech