Medicines Company Up On Rumors Of Potential Buyout By Novartis

Shares of The Medicines Company (NASDAQ:MDCO) surged almost 20% on Nov 19 following a Bloomberg report about a potential acquisition of the company by Swiss pharma giant, Novartis (NYSE:NVS) .

The Medicines Company has completed three pivotal studies on its sole pipeline candidate, inclisiran, as a potential treatment for lowering LDL-C (bad cholesterol). Impressive data from these studies are likely making the company an attractive takeover choice.

The Medicines Company has a partnership with Alnylam Pharmaceuticals (NASDAQ:ALNY) for the development of PCSK9 inhibitor, inclisiran. Both companies are looking to file regulatory applications seeking approval for the same in the United States in the fourth quarter of 2019 and in Europe during the first quarter of 2020.

Shares of The Medicines Company have skyrocketed 266.8% so far this year compared with the industry’s growth of 2.5%.

Data from the studies showed that 18 months of treatment with inclisiran led to a reduction in LDL-C level of more than 50% in patients with heterozygous familial hypercholesterolemia (HeFH) and atherosclerotic cardiovascular disease (ASCVD). The patients were treated with the maximum tolerated dose of statin therapy alone or in combination with Merck’s (NYSE:MRK) Zetia. Moreover, inclisiran will also allow much less frequent dosing in patients compared to other popular LDL-C lowering drugs like Sanofi/Regeneron’s Praluent and Amgen’s Repatha. While Praluent and Repatha are approved with once every two weeks or once a month dosing, inclisiran has been developed for twice-a-year dosing.

With several drugs of Novartis set to lose patent protection over the next few years, the company is focused on strengthening its pipeline with the inclusion of next-generation treatments for several diseases. The inclusion of inclisiran in Novartis’ commercial portfolio is likely to boost its cardiovascular portfolio further.We expect that the acquisition of inclisiran by Novartis will boost the candidate’s prospects as the company has a strong position in the market and cash resources to support the launch and fight competition.

However, Novartis and The Medicines Company have not confirmed the deal. Moreover, it is rumored that there can be bidders for The Medicines Company other than Novartis.

Zacks Rank

The Medicines Company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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