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Biogen (BIIB) to Buy HI-Bio to Expand Rare Disease Pipeline

Biogen BIIB entered into a definitive agreement to acquire private biotech, HI-Bio, for a $1.15 billion upfront payment.

The acquisition will expand Biogen’s rare disease pipeline by adding Hi-Bio’s lead candidate, felzartamab, a promising late-stage ready asset with potential application across a range of rare immune-mediated diseases. Felzartamab, a fully human anti-CD38 monoclonal antibody, has demonstrated an impact on key biomarkers and clinical endpoints in three renal diseases.

Felzartamab is being developed in a phase II study for IgA nephropathy (IgAN), a chronic kidney disease. Also, phase II studies are completed in two other kidney diseases — primary membranous nephropathy (PMN) and antibody-mediated rejection (AMR) in kidney transplant recipients. HI-Bio has plans to advance felzartamab into phase III for all indications.

HI-Bio has received Breakthrough Therapy Designation and Orphan Drug Designation (ODD) from the FDA for the PMN indication. It has received ODD for AMR in kidney transplant disease.

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Biogen’s stock has declined 13% so far this year compared with a decrease of 5.2% for the industry.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

HI-Bio’s pipeline also includes zastobart/HIB210, an anti-C5aR1 antibody, which is in phase I development. This candidate has the potential to be developed across a range of complement-mediated diseases.

In addition to the upfront payment, Biogen will be entitled to make up to $650 million in potential milestone payments to HI-Bio for a total potential deal value of $1.8 billion. The transaction is not expected to impact Biogen’s 2024 financial guidance and is expected to close in the third quarter of 2024.

The acquisition looks like a strategic fit for Biogen, which is grappling with fierce competition for its multiple sclerosis drugs and slow sales of a new Alzheimer’s drug, Leqembi. The company needs to diversify its portfolio beyond the risky neuroscience field to other therapeutic areas like immunology.

HI-Bio in-licensed exclusive rights to develop and commercialize felzartamab across all indications in all countries and territories, excluding China, from Germany-based global biopharmaceutical company MorphoSys AG MOR.

MorphoSys AG originally developed felzartamab for treating multiple myeloma. MorphoSys AG is due to be acquired by Novartis NVS for €68 per share or an aggregate of €2.7 billion. The acquisition will add late-stage oncology candidate pelabresib to Novartis’ pipeline.

Zacks Rank and Stock to Consider

Biogen currently has a Zacks Rank #3 (Hold).

Biogen Inc. Price and Consensus

Biogen Inc. Price and Consensus
Biogen Inc. Price and Consensus

Biogen Inc. price-consensus-chart | Biogen Inc. Quote

A better-ranked stock in the healthcare sector is Atara Biotherapeutics ATRA, which has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 60 days, the Zacks Consensus Estimate for Atara Biotherapeutics’ 2024 loss per share has narrowed from $1.78 per share to $1.22 per share. Estimates for 2025 have narrowed from 95 cents per share to 58 cents per share. This year, shares of Atara Biotherapeutics have risen 36.5%.

Earnings of Atara Biotherapeutics beat estimates in two of the last four quarters while missing in the other two. ATRA delivered a four-quarter average earnings surprise of 9.17%.

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Novartis AG (NVS) : Free Stock Analysis Report

Biogen Inc. (BIIB) : Free Stock Analysis Report

Atara Biotherapeutics, Inc. (ATRA) : Free Stock Analysis Report

MorphoSys AG Unsponsored ADR (MOR) : Free Stock Analysis Report

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