Biogen Inks Deal With TMS To Acquire Phase II Stroke Asset

Biogen Inc BIIB announced that it has signed an option agreement with private biotech, TMS Co., Ltd. to acquire the latter’s phase II acute stroke candidate TMS-007 and backup compounds.

Biogen is expected to pay $4 million upfront and an additional $18 million if it exercises the option with up to $335 million payable as potential milestone payments.

TMS-007 designed to restore blood flow following acute stroke is being evaluated in a phase II study. In August 2015, the candidate completed the phase l study.

With this acquisition, Biogen aims to boost its acute neurology portfolio, a strategic move for the company’s growth. To pursue innovative approaches in therapeutic area, Biogen already has a phase III ready pipeline candidate, BIIB093, under development for the prevention and treatment of edema in large hemispheric infarction, a severe type of stroke.

However, in February 2018, Biogen’s multiple sclerosis (MS) drug, Tysabri (natalizumab), failed to meet the primary and secondary endpoints in a phase IIb program, evaluating it for another indication, acute ischemic stroke (AIS).Some investors believe that natalizumab’s failure in the AIS study could be a reason behind this buyout from TMS.

Biogen’s core business area is multiple sclerosis (MS), a disabling disease of the brain and spinal cord. Key multiple sclerosis drugs in its portfolio are Tecfidera, Avonex and Tysabri. However, it is looking to diversify its business and aims at being a leader in neuroscience and adjacent therapeutic space.

In 2017, Biogen added seven new clinical stage programs to its neuroscience pipeline through advancing internal pipeline candidates as well as via external deals.

This year in March, Biogen agreed to acquire a phase IIb ready candidate, PF-04958242, for cognitive impairment associated with schizophrenia (CIAS) from Pfizer PFE. In January, Biogen acquired the rights to Karyopharm’s phase I ready investigational oral compound, KPT-350, for certain neurological and neurodegenerative conditions, primarily focused on amyotrophic lateral sclerosis or ALS. Biogen plans to start a phase I trial by the end of 2018.

Shares of Biogen have lost 4.2% year to date, outperforming the industry’s decline of 6.7%.

 

Biogen currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include CRISPR Therapeutics AG CRSP and Genomic Health Inc GHDX, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CRISPR Therapeutics’ loss per share estimates has narrowed by 7.8% for 2018 and 9% for 2019 in the last 60 days. The stock has skyrocketed 185.4% year to date.

Genomic Health’s earnings estimates surged 42.4% for 2018 and 2.7% for 2019 in the past 60 days. The stock has soared 51.2% so far this year.

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