Vertex ($VRTX) is ready to get its checkbook out to quell talk of it being a takeover target for Biogen ($BIIB) and Gilead ($GILD). The plan is to use the cash flow from recently approved cystic fibrosis drug Orkambi to strike pipeline-broadening deals, with gene therapy and RNA two fields in the company's sights.
Boston, MA-based Vertex has spent most of 2015 being viewed as a possible target for the bigger beasts of the biotech ecosystem. But having brought Orkambi to market and generated $130 million in sales from it last quarter, Vertex wants to spend time on the other side of the deal table. Last week's $105 million hookup with CRISPR Therapeutics is indicative of the new approach. Vertex CEO Jeff Leiden told Bloomberg biotechs developing gene therapies and RNA drugs are on his radar. And with Vertex's office overlooking the Boston bay, Leiden won't have to go far to find targets.
Leiden shied away from naming names. But in talking up the benefits of being based in Boston from a dealmaking perspective and expressing an interest in RNA and gene therapies, Leiden has given those who want to read the tea leaves a possible hit list for Vertex. Local gene therapy players bluebird bio ($BLUE), Dimension Therapeutics ($DMTX) and Voyager Therapeutics all fit the bill, as do RNA specialists Alnylam Pharmaceuticals ($ALNY) and Dicerna Pharmaceuticals ($DRNA), though which, if any, of these companies Leiden is interested in working with remains to be seen.
What is clear is that Leiden thinks Vertex is best served by wheeling and dealing its way to the status of a sustainable standalone business, not by courting a takeover bid from Biogen or Gilead. "There's complete alignment in the employees, the management and the board that we can create more value for patients and we can create more value for shareholders by being independent," Leiden said. The introduction of Orkambi is seen by Leiden as a validation of this stance. "Now we have a track record that we can really point to and say, 'This is the proof of that.'"
Vertex also has a price tag to deter all bar the biggest of biotechs. Having recovered from September's pan-biotech plunge, Vertex is now trading at a similar price to when Bernstein analyst Geoffrey Porges tipped it as an ideal target for a $45 billion takeover by Gilead back in April.
- read Bloomberg's article