SVB Leerink vandaag:
Where There's Smoke There's Fire? Gene Therapy M&A Torch Could Be Handed Over
Outperform: QURE / Market Perform: ONCE, BIIB, ABBV
• Bottom Line: QURE (OP) shares have been on a roller coaster ride recently based on the uncertain feasibility of the ONCE [MP]/RHHBY [NR] combination due to FTC concerns; we expect QURE's stock to rebound sharply today given speculation that the company is potentially in play to be acquired. We have long viewed QURE as a logical pearl for a pharma company seeking to add a growing gene therapy pipeline and manufacturing wherewithal to their stable. Our checks with a MEDACorp FTC specialist lead us to believe that issues which could conceivably confound an acquisition of ONCE by RHHBY may not apply to QURE as much, if at all. Reiterate OP on QURE.
• Rapid development progress on a number of fronts could provide some urgency for interested parties to act sooner rather than later; QURE's extensive pipeline is advancing well and should support a higher valuation as it develops further.
• Given the unknown nature of the requests by the Federal Trade Commission and UK Competition and Markets Authority (CMA), it is unclear exactly what hangups have been stalling the ONCE/RHHBY deal, but an FTC specialist believes that the RHHBY-ONCE deal could fall through since in ~90% of second requests, government enforcement actions (such as forced divestitures) follow.
• Recognizing that the RHHBY Merger Agreement specifically excludes hemophilia A development products from any sale, divesture, or license, the specialist believes that the FTC/CMA likely has issues with the competitive implications of ONCE's hemophilia A gene therapy candidates being subsumed within RHHBY.
• M&A appears possible for QURE assuming one or both conditions are satisfied: (1) an appropriate acquirer (i.e., less prominent player in hemophilia), and (2) AMT-180 (hemophilia A) remains early in development.
• Unlike ONCE, we think QURE’s versatile platform should appeal to buyers outside of hemophilia.