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More Immunotherapy Buyouts Likely After Kite Sale

Gilead Sciences Inc.'s (GILD) $11.9 billion purchase of immunotherapy firm Kite Pharma Inc. (KITE) is expected to usher in more deals in the biotech sector, analysts said.

The transaction is a "boon for the cell therapy space in general" and "heralds big biotech's view regarding the promise of cell therapy, opening the door for more favorable deals going forward as companies evaluate how to position themselves in the oncology space," wrote Raymond James & Associates Inc. analyst Reni Benjamin in a Monday note.

"Although Gilead is known to aggressively acquire game changing platforms and has now broken the mold by setting a high bar for cellular therapy companies, we believe competitors are likely to be incentivized to look at potential target companies with a focus on innovation, efficacy/safety, and competitive advantages," Benjamin added.

Potential acquisition candidates include Juno Therapeutics Inc. (JUNO) , Bellicum Pharmaceuticals Inc. BLCM, Adaptimmune Therapeutics plc ADAP, Fate Therapeutics Inc. (FATE) , Ziopharm Oncology Inc. (ZIOP) and Nantkwest Inc. (NK) , he wrote.

Another potential acquisition target includes bluebird bio Inc. (BLUE) , which like Juno has a collaboration with Celgene Corp. (CELG) , Wedbush Securities Inc. analyst David Nierengarten said. He noted that BlueBird has multiple business opportunities beyond CAR-T (chimeric antigen receptor T cell), which could make the company more attractive to a large, fully integrated pharmaceutical company than to an oncology-focused firm. He also said Tesaro Inc. (TSRO) is a candidate, although its shares were lower for much of Monday's trading session because the Kite deal takes Gilead off the table as one of the Tesaro's obvious acquirers for the near term.


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