By tucking in this retinal gene therapy firm, the Massachusetts-based company gains assets and synergy.
In a March 4 BTIG research note, analyst Thomas Shrader reported that Biogen Inc. (BIIB:NASDAQ) entered into an agreement to acquire Nightstar Therapeutics Plc (NITE:NASDAQ) for about $800 million, or $25.50 in cash per Nightstar share. Biogen expects the acquisition will close by mid-2019.
Shrader outlined what Nightstar, a retinal gene therapy developer, offers Biogen. Nightstar has two late-stage assets for ophthalmologic indications that "represent risk-mitigated opportunities for gene therapy and mesh well with Biogen's central nervous system expertise," he indicated.
Nightstar's lead asset, NSR-REP1, is an adeno-associated virus (AAV)-based gene therapy being developed for choroideremia, a condition characterized by progressive vision loss. Phase 3 data are expected for the therapeutic in this indication in H2/20. The other therapy, NSR-RPGR, is being developed for X-linked retinitis pigmentosa; a Phase 2/3 study in this indication is in the enrollment phase.
As for the market potential of the drug candidates, these two conditions afflict about 15,000 and 20,000 people, respectively, in the Group of Seven alone, highlighted Shrader.
The early-stage assets in Nightstar's pipeline "also look good," and "have the potential to be further sources of upside in the future," Shrader pointed out. They include preclinical AAV-based product candidates for Stargardt disease, Best disease and additional retinitis pigmentosa programs.
Shrader noted that Biogen's next acquisition might be related to the indication of Huntington's disease, which "would make a lot of sense."
BTIG has a Buy rating and a $362 per share 12-month target price on Biogen, whose stock is currently trading at around $326.87 per share.
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Disclosures from BTIG, Biogen Inc., Equity Research, March 4, 2019
Analyst Certification I, Thomas Shrader, PhD, CFA, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report.
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