VRTX

The $5 BILLION Reason Alpine Immune Sciences (ALPN) Stock Is Up 30% Today

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Drug maker Alpine Immune Sciences (NASDAQ:ALPN) got a $4.9 billion buyout offer from Vertex Pharmaceuticals (NASDAQ:VRTX) after getting good news on a new drug.

Povetacicept, an autoimmune drug, won a successful Phase 2 review from the Food and Drug Administration (FDA) for treating a rare kidney disease and will go into Phase 3 trial.

Alpine stock rose 21% on April 10, and another 36% overnight, opening April 11 at $64.18 per share.

More Than Kidneys?

While Povetacicept is only being tested for a rare kidney condition, Vertex hopes it boosts its presence in the immunology space. Vertex CEO Reshma Kewalramani called Povetacicept a “pipeline-in-a-product,” meaning it could be tested for other conditions.

Alpine can use the deal because it said Phase 2 costs exceeded expectations. Alpine ended 2023 with $44 million in cash, out of $327 million in cash and securities. It had $79 million in negative operating cash flow in 2023.

Vertex, meanwhile, finds itself in an arms race with other drug companies in immunology. Johnson & Johnson (NYSE:JNJ) sees more deal potential. AbbVie (NASDAQ:ABBV), Bristol Myers Squibb (NYSE:BMY) and Sanofi (NYSE:SNY) have all increased spending in the area.

Vertex shares got a boost in January after a successful early trial for VX-548, a non-opioid pain medication. Its market cap is about $102 billion on 2023 revenue of about $10 billion, of which $3.6 billion was net income.

What Happens Next?

The best-known immunological is Merck’s (NYSE:MRK) cancer drug Keytruda, but there are many in other disease areas. Expect more deals.

On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

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