Jefferies downgrades Tourmaline Bio stock to Hold following Novartis acquisition

Investing.com - Jefferies downgraded Tourmaline Bio (NASDAQ:TRML) from Buy to Hold and lowered its price target to $47.50 from $64.00 following Novartis’ acquisition announcement. The stock has shown remarkable momentum, delivering a 110% return over the past six months and currently trading near its 52-week high, according to InvestingPro data.

Novartis announced it will acquire Tourmaline Bio at $48 per share, representing approximately a 60% premium to the closing price and about 130% premium to the 60-day volume-weighted average price (VWAP). InvestingPro analysis shows the company maintains strong financial health with a current ratio of 24.7 and holds more cash than debt on its balance sheet.

The deal values Tourmaline Bio at approximately $1.4 billion in equity value and more than $1.1 billion in enterprise value, with the company having runway extending to the second half of 2027.

The acquisition is expected to close in the fourth quarter of 2025 and has been unanimously approved by the boards of directors of both companies.

Jefferies noted the deal makes strategic sense given Novartis’ strong cardiovascular franchise, comes at appropriate timing ahead of Novo’s Phase 3 trial, offers reasonable valuation compared to similar deals, and has a high likelihood of completion with low FTC risk.

In other recent news, Novartis has announced an agreement to acquire Tourmaline Bio for approximately $1.4 billion, offering $48 per share in cash. This acquisition will provide Novartis with access to Tourmaline’s anti-IL-6 monoclonal antibody, pacibekitug, which is in late-stage development for addressing systemic inflammation in atherosclerotic cardiovascular disease. The boards of both companies have approved the transaction, and it is expected to be finalized in the fourth quarter of 2025. Following the announcement, Guggenheim downgraded Tourmaline Bio from Buy to Neutral, citing the acquisition price as fair and reflective of the growing interest in IL-6 as a target. Similarly, Wedbush downgraded the stock from Outperform to Neutral, aligning its price target with the acquisition offer. These downgrades emphasize the analysts’ views on the acquisition’s valuation and its implications for Tourmaline’s stock.

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