Biogen to Buy Stromedix - Analyst Blog


Biogen Idec ( BIIB ) recently signed a deal to acquire privately-held biotech company, Stromedix, Inc. With this acquisition, Biogen will gain access to treatments being developed for fibrosis and organ failure.

Lead Candidate

The lead candidate at Stromedix is STX-100, which is being developed for the treatment of fibrosis. The candidate is scheduled to enter into a phase II study that will be conducted in patients with idiopathic pulmonary fibrosis ( IPF ). According to the press release issued by Biogen, more than 200,000 patients suffer from IPF in the US and Europe.

With no FDA-approved treatment available in the market, STX-100 could gain a strong foothold if developed successfully. The candidate enjoys orphan drug designation from the FDA for this indication. Besides IPF, STX-100 has the potential to be developed for additional fibrotic indications. STX-100 also has orphan drug status for chronic allograft dysfunction.

Apart from STX-100, Stromedix has a preclinical candidate in its pipeline for the treatment of injury due to inflammation.

Terms of the Deal

Biogen intends to make an upfront payment of $75 million. Besides this, the company could pay up to $487.5 million on the achievement of certain development and regulatory based milestones for multiple indications.

Our Take

The deal is in line with Biogen's efforts to strengthen its immunology pipeline. Besides this deal, Biogen has signed another deal in 2012 to expand its early/mid-stage pipeline. In early Jan, the company joined hands with Isis Pharmaceuticals, Inc. ( ISIS ) for the development and commercialization of an antisense drug for the treatment of spinal muscular atrophy ( SMA ).

We currently have a Neutral recommendation on Biogen, which carries a Zacks #3 Rank (short-term "Hold" rating).

BIOGEN IDEC INC ( BIIB ): Free Stock Analysis Report
ISIS PHARMACEUT ( ISIS ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BIIB , IPF , ISIS , SMA

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