Biotech stocks heated up Thursday, driven by a spate of deals, as Novartis scooped up a licensing pact with Arvinas Therapeutics and Janux Therapeutics was said to be exploring strategic options.
On today's stock market, Arvinas stock jumped 1.4% to 37.26, while Janux stock popped 12.1% to 50. The move from Janux followed an 11.5% spike during Wednesday's regular session following a Bloomberg report that the biotech company has garnered takeover interest.
The Arvinas deal focuses on the company's protein degradation technology, which uses the body's natural means of ridding itself of proteins to target problematic actors in cancer. Novartis will pay Arvinas $150 million up front to license ARV-766, an experimental prostate cancer treatment. Arvinas could also receive up to $1.01 billion in milestones and tiered royalties on sales.
Further, Novartis is buying Arvinas' preclinical program, AR-V7. This drug is in laboratory testing for metastatic castration-resistant prostate cancer.
Meanwhile, biotech stock Vera Therapeutics soared 17.3% to 48.82 after Vertex Pharmaceuticals, on Wednesday, pledged to buy Alpine Immune Sciences for $4.9 billion. Vera is working on a similar treatment for a chronic kidney disease known as IgA nephropathy.
Biotech Stock Nabs Another Deal
Arvinas has scored deals with numerous Big Pharma companies over the years. Notably, Arvinas inked a deal with Pfizer in 2021 to collaborate on a breast cancer treatment that focuses on the estrogen receptor. That drug, vepdegestrant, is Arvinas' most advanced treatment.
In both cases, the drugs hijack the body's natural garbage disposal for proteins.
Arvinas is also testing treatments for Parkinson's disease and various cancers.
In a recent Phase 1 and Phase 2 study, Arvinas' ARV-766 reduced levels of the PSA protein by half in 41% of patients. Heightened levels of that protein are tied to a higher risk of prostate cancer. The drug also showed "encouraging durability," Wedbush analyst Robert Driscoll said in a report.
"While we tick down our price target, we believe this transaction is prudent from an operational perspective, as a Phase 3 study of ARV-766 in metastatic castration-resistant prostate cancer would have been a tall task, in addition to multiple registrational trials of estrogen receptor-degrader vepdegestrant with partner Pfizer," he said.
He kept his outperform rating on biotech stock Arvinas, though he trimmed his price target to 57 from 59.
"We see Novartis as an ideal partner to maximize ARV-766's value, given Pluvicto's near-blockbuster success in metastatic castration-resistant prostate cancer," he added.
Pluvicto belongs to the red-hot radiopharmaceuticals class and targets the prostate-specific membrane antigen. In comparison, Arvinas' drug works by blocking the androgen receptor, a hormone.
Janux Reportedly Navigates Interest
In related news, Janux has reportedly hired a financial advisor to help it navigate takeover interest, according to Bloomberg. Representatives of Janux didn't immediately return a request for comment from Investor's Business Daily.
Janux stock more than tripled on Feb. 27 after the company unveiled promising results for its prostate cancer treatment. In one dosing group, 83% of patients saw their PSA levels decline by at least half. In another dosing group, 56% of patients hit the same mark. Janux uses a patient's own immune system to kill tumor cells — a tech it calls T-cell engagers.
The biotech stock has a best-possible Relative Strength Rating of 99, putting its 12-month performance among the leading 1% of all stocks, according to IBD Digital.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
