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Jefferies has identified several biotechnology companies as promising merger and acquisition targets, highlighting firms with de-risked or commercial-stage assets that could generate significant sales. In a recent research note, the firm suggested that market volatility and policy uncertainty had suppressed M&A activity, but deal volume could increase in the second half of the year.
The investment bank specifically mentioned Akero Therapeutics (NASDAQ:AKRO) as a potential target with sales potential of $2-3 billion and strong Phase II data for NASH with F4 cirrhosis. Scholar Rock (NASDAQ:SRRK) was also highlighted as promising, with a September 22 PDUFA date and likely FDA approval for its SMA treatment. These valuations can be put in perspective against Pfizer (NYSE:PFE)’s robust $62.5 billion in annual revenue and impressive 74% gross margin.
Jefferies noted that biotech acquisitions typically occur after markets stabilize following periods of volatility, when buyers and sellers adjust to new valuations. The firm suggested that the recent $9.5 billion biotech deal last week could signal increasing M&A activity as the market environment improves.
The research firm indicated that uncertainty around potential sector-specific tariffs and drug pricing policies has made investment decisions more challenging for business development teams. However, Jefferies believes the industry has passed "peak negativity" with moderated rhetoric on drug pricing and expectations that Section 232 tariffs will be "less bad than feared."
Total (EPA:TTEF) deal value for 2025 is already approaching $36 billion for transactions exceeding $500 million, nearly matching full-year 2024 levels despite being only midway through the year. The number of large deals is also tracking in line with previous years, with 12 transactions over $500 million compared to 27 and 26 deals in the two prior years. Want deeper insights into biotech valuations and M&A trends? InvestingPro offers exclusive access to detailed financial metrics, Fair Value calculations, and comprehensive industry analysis for over 1,400 US stocks.
In other recent news, Health and Human Services Secretary Robert F. Kennedy has restructured the Advisory Committee for Immunization Practices (ACIP) by appointing eight new members. This change is seen as an effort to restore public trust in vaccine recommendations, following concerns about the committee’s transparency and potential conflicts of interest. Analysts from BMO Capital have highlighted potential risks for Merck (NSE:PROR), Pfizer, and BioNTech (NASDAQ:BNTX) stocks due to these changes, although they consider the development more of a headline risk than a fundamental shift in the sector. Cantor Fitzgerald has maintained its Neutral stance on Pfizer, with a price target of $24, noting the uncertainty surrounding potential new guidelines from the ACIP that could impact Pfizer’s Comirnaty vaccine usage.
The reconstitution of ACIP has prompted market reactions, with shares of Moderna (NASDAQ:MRNA), Pfizer, and BioNTech experiencing declines. This reflects investor concerns over potential disruptions in vaccine approvals and recommendations that could affect vaccine sales. Meanwhile, Pfizer has been in discussions with the Trump administration about drug pricing policies, but no commitments have been made. These discussions are part of broader efforts to implement a policy aimed at reducing the cost of branded medicines in the U.S. The pharmaceutical industry closely monitors these regulatory and policy developments, as they could have significant implications for vaccine distribution and pricing strategies.
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