Stocks poised to rise as this corner of the cancer treatment market heats up | Wilnesh News
One corner of the oncology market—radiopharmaceuticals—has attracted a lot of attention recently. The therapy aims to destroy cancer cells by binding radioactive particles to target molecules and then sending them directly into tumors. Novartis currently has two products on the market and is undergoing extensive clinical trials. Interest in it is so high that it has been at the center of a series of acquisition announcements by Big Pharma over the past year. The latest news came earlier this month when Novartis reached a deal to acquire Mariana Oncology for $1 billion. Novartis already has two treatments on the market: Pluvicto for a form of advanced prostate cancer and Lutathera for neuroendocrine tumors. Eli Lilly completed its $1.4 billion acquisition of Point Biopharma in December, and Bristol-Myers Squibb completed its $4.1 billion acquisition of RayzeBio in February. Then in March, AstraZeneca said it planned to acquire clinical-stage biopharmaceutical company Fusion Pharmaceuticals for $2.4 billion. “Any big pharma company with an existing oncology business will probably want to get in on the radiopharmaceutical game because the data is already looking pretty good,” said Jefferies analyst Andrew Tsai. “Whatever you have What you see is that these companies are not necessarily acquiring the main assets of these companies, it’s more about acquiring the manufacturing, the technical know-how and it seems very complicated to do it yourself,” he added. Growth Opportunities for the Next Decade Still, radiopharmaceuticals are just one part of each company’s larger product portfolio. Novartis is a leader in the field, with two therapies already on the market and multiple clinical trials underway. “The Marianna acquisition … gives them greater discovery capabilities,” said Oppenheimer analyst Jeff Jones. But Novartis’ shares have been underperforming. The stock is up about 1% year to date and has an average analyst rating of Hold. According to a report from FactSet, analysts predict that the average price target will increase by about 8%. Investors’ attention to Eli Lilly has grown 38% so far this year, mainly due to its diabetes drug Mounjaro and weight loss drug Zepbound. Meanwhile, shares of Bristol-Myers Squibb have struggled, down 18% year to date, as investors focus on the prospect of some of the company’s older drugs going off patent later this decade. Protect. However, AstraZeneca is up 17% year to date. According to FactSet, the average analyst rating is “overweight” and is nearly 6% higher than the average analyst price target. Analysts believe Big Pharma’s acquisitions are just the beginning, as large companies and smaller biotech companies work to improve existing treatments and discover new ones. The end result could be better efficacy and a wider range of tumors that the therapy can treat. William Blair said investing in the industry could provide investors with long-term growth opportunities over the next decade. Read more about this trend: This emerging cancer treatment could represent a $25 billion market opportunity, and it’s already a hotbed for mergers and acquisitions “Ownership of isotope production could be seen as a significant competitive advantage for big pharma After AstraZeneca announced the news, analyst Andy Hsieh wrote in a March report: “After achieving a stable, robust and redundant supply chain, the next focus may be on targeting. Specific targets (preferably beyond PSMA and SSTR2) and oncology indication optimization models (radioligands, engineered peptides/proteins, nanobodies or antibodies), which we believe may lead to better outcomes in the long term. Continued investor engagement and innovation in radiopharmaceuticals represents a $25 billion market Meanwhile, RBC Capital Markets sees a $25 billion market opportunity in the space, writes analyst Gregory Renza, MD. “We believe TRT development is still in its early stages and next-generation technologies that can improve treatment efficacy and address a broader range of cancer targets have the potential to drive value creation in the field,” Dow said in a February note. One place to watch is the clinical-stage biotech companies in this space, which may be prime candidates for acquisition. These stocks could be an interesting investment for those willing to accept some risk. One name Jones likes is Perspective Therapeutics, which he believes will outperform the market. The company’s valuation is close to $1 billion and currently stands at about $888 million. Shares are up 280% so far this year, which Jones said is driven by enthusiasm in the space. CATX 1Y mountain Perspective Therapeutics Cantor Fitzgerald is also bullish on this name so far this year. “While the stock has performed well this year… we still see room for upside. Our (discounted cash flow) analysis puts its equity value at over $4B, while its current market cap is ~$1B,” said analyst Louise Chen on Zhou wrote in a report. Jones noted that the company has been on the radar of big pharmaceutical companies since going public through a reverse merger last year. Perspective is currently conducting trials in neuroendocrine cancer and melanoma, using alpha emitters rather than the beta emitters used in Novartis treatments. “Alpha (launchers) have a stronger punch…in a more targeted way. So it’s really an ideal allocation,” said Piper Sandler analyst Edward Tenthoff, who is not involved in Perspective Therapeutics. Janus Henderson Investors Dan Lyons, portfolio manager and research analyst at , is bullish on Perspective and its possibilities. “They have extensive experience in radiopharmaceuticals,” he said. He also likes and owns Novartis and Eli Lilly in the large-cap space, as well as biotech Immunome, which has a market cap of $865 million. Immunome is in the discovery phase of a targeted radioligand therapy for certain solid tumors of the lung, breast and esophagus. Then there’s Lantheus Holdings, which describes itself as a radiopharmaceutical-focused company with a market capitalization of $5.6 billion. “Lantheus Holding is a company deeply committed to diagnostics (and) moving toward treatments,” Jones said. The company’s diagnostic imaging is used in conjunction with Novartis’ Pluvicto. On the treatment side, Lantheus has partnered with Point Biopharma to deliver targeted radiation therapy for metastatic castration-resistant prostate cancer. In December, just before Eli Lilly completed its acquisition of Point Biopharma, the therapy met its primary endpoint in a phase 3 trial. Year to Date Treatment drug options for prostate cancer candidates. In addition, Lantheus has agreed to purchase up to 19.9% of Perspective’s outstanding common stock, and Perspective will acquire the assets and related leases of Lantheus’ radiopharmaceutical manufacturing facility in New Jersey. Analysts have an average rating of “buy” on the stock, according to FactSet. Leerink Partners analyst Roanna Ruiz is among those who like the company. Her price target on the stock is $106, which suggests more than 30% upside from Wednesday’s closing price. She expects recent M&A activity to continue to attract investors. “We believe this further validates Lantheus’ recent partnership with Perspective Therapeutics… as Lantheus has ‘last look’ rights to match any bid from Perspective and the opportunity to opt-in,” she wrote in a May 2 note. .
