Ariad Pharmaceuticals, Inc.
Investors in Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) should be smiling from ear to ear today following the news that the company will be acquired by Takeda Pharmaceutical in an all-cash deal valued at $5.2 billion. Under the terms of the deal, Takeda will acquire all the outstanding shares of Ariad for $24 per share in cash, representing a total enterprise valuation of approximately $5.2 billion for Ariad. The price represents a premium of 75% over Ariad’s closing price of $13.74 per share on January 6.
Cowen analyst Chris Shibutani commented, “We see this combination as strategically logical and a strong fit, across many levels of consideration. From a financial/commercial perspective, we see brigatinib’s revenue potential (we project >$1B by 2023) as meeting the criteria which we understand Takeda/Millennium has been targeting. From an R&D perspective the small molecule assets and R&D capabilities potentially lend themselves well to consideration of interesting potential combination products (e.g., TKI inhibitor + Proteasome Inhibitors) across now a broader pipeline base; Ariad’s immunokinase discovery program provides an attractive platform for Takeda to conduct potential combination studies using oral targeted agents + IO agents.”
“While the US oncology market has been the focus of Ariad’s commercial efforts to this point, especially current management’s sale of the very modest European commercial infrastructure to Incyte last June, there is clearly opportunity for Takeda to leverage the portfolio with greater impact into global markets including in particular, Asia,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Chris Shibutani has a yearly average return of 14.1% and a 67% success rate. Shibutani has a 54.6% average return when recommending ARIA, and is ranked #700 out of 4350 analysts.
EXACT Sciences Corporation
EXACT Sciences Corporation (NASDAQ:EXAS) shares are on the rise today after the company pre-announced fourth-quarter tests completed of ~82k, above the guide of 78k. EXAS estimates Q4 revenues of $34.9M-35.4M, far above consensus of $30.1M. For 2016, EXAS expects to generate revenues of $99-99.5M (+150% Y/Y), nearly matching the high end of its initial guide last year of $90-100M, and tests completed of ~244k, above its guide of 240k.
In reaction, Canaccord analyst Mark Massaro reiterated a Buy rating on shares of EXACT Sciences, with a price target of $24, which represents a potential upside of 34% from where the stock is currently trading.
Massaro noted, “EXAS pre-announced an excellent Q4 with solid, broad-based beats across several key metrics and we expect the stock to be up and pare back losses seen over recent weeks. EXAS remains one of our top growth ideas for 2017. We are attending an analyst lunch with management today (Monday), and EXAS is scheduled to present at an investor conference on Thursday at 7:30am (10:30am ET).”
Out of the 11 analysts polled by TipRanks, 6 rate Exact Sciences stock a Buy, while 5 rate the stock a Hold. With a return potential of 1.0%, the stock’s consensus target price stands at $18.10.