Shares in Apellis Pharmaceuticals (APLS) rocketed over 130% in pre-market trading today after it was bought by peer Biogen (BIIB) for $5.6 billion to expand its portfolio of rare eye and kidney disease treatments.
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Rare Disease Push
The deal marks Biogen’s push to bolster growth as revenue from its multiple sclerosis drugs wanes and as it seeks to build a broader rare-disease drug pipeline.
Biogen will gain access to Apellis’ drug Empaveli, which is approved for two rare kidney diseases as well as a rare blood disorder. It will also acquire Syfovre, which is approved to treat an advanced eye disorder that is one of the leading causes of blindness globally.
Under the terms of the deal, Apellis shareholders will receive $41 per share in cash, representing a premium of about 140% to the stock’s last close.
They are also eligible to receive two payments of $2 per share each, contingent on certain global sales milestones for Apellis’ eye disorder drug Syfovre, the companies said.
Drugs Revenue Boost
The two drugs generated combined revenue of about $689 million last year and are expected to grow in the mid-to-high teens range at least through 2028, the companies said.
“Consistent with our strategy, this acquisition immediately advances Biogen’s ongoing transformation. The addition of Apellis expands our growth portfolio in immunology and rare disease with two approved, best-in-class medicines that complement our existing portfolio and bolsters our near-and long-term growth potential,” said Christopher A. Viehbacher, Biogen’s President and Chief Executive Officer.
The deal is expected to close in the second quarter this year.
Is BIIB a Good Stock to Buy Now?
On TipRanks, BIIB has a Moderate Buy consensus based on 11 Buy, 15 Hold and 1 Sell ratings. Its highest price target is $250. BIIB stock’s consensus price target is $206.70, implying a 10.20% upside.
