Eli Lilly said Tuesday it will buy cancer specialist Point Biopharma Global for $1.4 billion, launching PNT stock to a two-year high.
Point Biopharma is working on radiological treatments for cancer. These drugs link a radioisotope to a molecule capable of targeting cancer cells, making it possible to deliver radiation directly to cancer cells and limiting the impact on healthy tissue.
Analysts say the deal is a boon for numerous companies. Point Biopharma is partnered with Lantheus Holdings on its two latest-stage efforts. The deal also highlights Novartis, which has added about $1.6 billion in revenue after buying two similar companies. RBC Capital Markets analyst Brian Abrahams says Ambrx Biopharma could also benefit. Ambrx is working on targeted chemotherapy using drugs known as antibody drug conjugates.
On today's stock market, PNT stock skyrocketed 84.9% to 12.36. Lantheus stock also jumped 10.4% to close at 74.65. Eli Lilly shares, on the other hand, toppled 2.4%, ending the regular session at 525.19. Ambrx stock tumbled 7.3% to 10.36.
PNT Stock: Targeting PSMA In Prostate Cancer
Point Biopharma's leading asset, dubbed PNT2002, targets the prostate-specific membrane antigen, or PSMA, in patients with metastatic castration-resistant prostate cancer. PSMA shows up in high levels in more than 85% of prostate cancer patients, Point Biopharma says. The company expects to have results from a Phase 3 study in the fourth quarter. Ambrx, RBC's Abrahams notes, is also working on a PSMA-directed treatment for prostate cancer.
Novartis is testing a radiological approach to prostate cancer using a PSMA-focused drug.
"Importantly, the deal removes the risk of an unfavorable cross-(study) comparison" between Point's and Novartis' studies, Leerink Partners analyst Faisal Khurshid said in a note to clients.
Point Biopharma is also working on a treatment for neuroendocrine tumors. These tumors have cells that are similar to nerve cells and hormone producing cells, according to the Mayo Clinic.
For Lantheus, "the deal puts a nice spotlight on radiopharm therapeutics as an important emerging class in oncology," Leerink Partners analyst Rosanna Ruiz said in a report. Under the terms of the deal with Point Biopharma, Lantheus is responsible for preparing and submitting regulatory filings for the leading drugs, PNT2002 and PNT2003, and U.S. commercialization.
"We are positive on the fact that Lilly and Lantheus are now to become collaborators," Ruiz said. "In this capacity, we believe it's possible that Lilly could be interested in offering regulatory expertise and additional commercial resources to Lantheus' PNT2002 and PNT2003 future launches, in addition to bolstering Point's robust manufacturing footprint for PNT2002 and PNT2003 as well."
A Boon For Radiopharmaceuticals
Lilly will pay $12.50 per share on PNT stock. That's north of the 11 price target Leerink's Khurshid has assigned Point Biopharma shares.
"Overall, we see the deal as positive for Point Biopharma and the radiopharmaceutical space as a whole," he said.
Importantly, the deal also includes an internal manufacturing facility slated to come online before the end of the year, Evercore ISI analyst Umer Raffat said in a note. This will help bolster Lilly's supply of a radioisotope called lutetium, for which Point Biopharma already has three suppliers.
Further, Point Biopharma also has partnerships with multiple suppliers of another radioisotope known as actinium. Point is using actinium in other cancer treatments.
"Any radiopharma company is only as good as how much radioisotope supply they can get," he said.
He has an in-line rating on Lilly shares, but didn't list a rating for PNT stock.
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