Everything has gone according to plan for Actelion lately, with yesterday’s US approval of Uptravi coming after an apparent mis-step – losing out to AstraZeneca in the race to acquire ZS Pharma – turned out to be a dodged bullet when ZS’s lone project flopped.
So what now? Actelion might be a tempting takeover target were it not for its arguably overvalued market cap of $15bn-plus. Even so it is possible that a buyer might emerge; Actelion’s pulmonary hypertension franchise is forecast to bring in sales of more than $2.5bn a year in 2020. But who? And might Actelion acquiesce or opt to remain independent, likely necessitating a defensive purchase of its own?
Today the US, tomorrow the world
Uptravi has been approved in the US to delay disease progression and reduce the risk of hospitalisation for pulmonary arterial hypertension, a largely expected outcome following positive data from the phase III Griphon trial (Selexipag hit puts Actelion back on the buyout radar, June 16, 2014).
Actelion intends to launch the drug in the US in early January, and Jefferies analysts are betting on a positive EU CHMP opinion during the first quarter and European rollout following in the spring.
The company has five approved products for PAH and, while Tracleer is haemorrhaging sales as is common with off-patent drugs, Opsumit and Uptravi will more than make up for this. All told, Actelion’s PAH drugs are forecast to bring in more than $3bn in 2020, EvaluatePharma’s sellside consensus suggests.
|Actelion's pulmonary hypertension drugs|
|Global sales ($m)|
|Opsumit||Endothelin receptor antagonist||197||805||1,290||1,590||42%|
|Uptravi||Prostacyclin receptor agonist||-||173||672||1,126||N/A|
|Tracleer||Endothelin A & B receptor antagonist||1,551||807||308||148||-32%|
And despite Actelion’s somewhat overheated market value, that franchise could still tempt a buyer. Shire has previously been linked with the company; rumours of an $18bn bid being offered and slapped down swirled in June (Shire needs to acquire, and Actelion fits the bill, June 8, 2015). If Shire did in fact make such an approach, it will – post-Uptravi approval – have to offer rather more if it wants its second try to be successful.
Actelion might also catch the eye of AstraZeneca or Novartis thanks to the ease with which its products would fit into those companies’ cardiovascular offerings. Novartis could also see appeal in buying a fellow Swiss group, whereas Astra might find it pleasing to take its revenge by buying the company that ended up the winner in the ZS debacle (Forehead slaps in order for Astra as data dwarf $2.7bn deal, November 9, 2015).
Fork in the road
And maybe Actelion, aware that its share price is up 17% from the start of the year and suspecting that it might not climb much higher, would welcome a takeout. Then again, maybe not: and, if not, Actelion will need a defensive move, and Relypsa remains a decent candidate.
As ZS Pharma’s rival in the hyperkalaemia space, Relypsa represents a second chance to buy in such a technology after Actelion’s initial attempt on ZS failed. Moreover, the side-effects seen with ZS’s hyperkalaemia candidate could mean that it will pose less of a challenge to Relypsa’s, Veltassa, when it comes to market. Veltassa is already approved, albeit with a black box warnings about the risk of drug-drug interactions.
It seems likely that the coming year contains a stark choice for Actelion: buy or be bought.