September 10, 2017
The Italian Biotechnology Company Overlooked in Kite Deal Frenzy
Source: Bloomberg Terminal NSN OVYYQ06K50XT <GO>
Milan-based company also operates in cancer CAR-T research
Pharma shares rallied after Gilead announced $11.9b deal
By Chiara Albanese and Chiara Remondini
(Bloomberg) -- Amid all the hubbub surrounding Gilead Sciences Inc.’s $11.9 billion purchase of Kite Pharma Inc., which sparked a flurry for biotechnology companies developing novel CAR-T cancer therapies, one tiny Italian company may have gotten overlooked.
While shares of drugmakers developing similar or competing treatments -- including Juno Therapeutics Inc. and Bluebird Bio Inc. -- soared as the deal sparked fresh speculation that Kite’s peers could also draw takeover attention, Milan-listed Molecular Medicine SpA barely budged. The stock was stagnant even as the buying interest spread to Brussels and Paris, where Celyad SA and Cellectis SA climbed.
It was also subdued on Aug. 30, when Novartis AG of Switzerland made history by becoming the first company to win approval for a CAR-T drug in the U.S.
Applying Kite and Juno’s valuation multiples based on the “undisturbed price, MolMed should be worth 3.88 euros a share, or 8.7 times the current price,” said Mario Russo, a senior analyst at Sun Hung Kai Financial U.K. The stock rose 3.5 percent to close at 45 cents on Friday.
Like its peers, MolMed is developing therapies based on CAR T-cells, or chimeric antigen receptors T-cells, which reprogram the body’s immune system to attack tumors.
The Italian company’s CAR-CD44v6 therapy was shown to be effective and safe in pre-clinical models on both hematological and solid tumors, Riccardo Palmisano, Molmed’s chief executive officer, said in an interview.
Kite Pharma became a hot asset because it may soon have a treatment for select patients with a type of blood cancer known as non-Hodgkin lymphoma on the market this year, with U.S. approval anticipated by the end of November.
“The Italian stock market is not competent enough about innovative biotech to capture the value of such important news,” Palmisano said.
Russo predicts that CAR-T treatments aren’t likely to reach peak sales level before 2025.
BLUE US (Bluebird Bio Inc)
JUNO US (Juno Therapeutics Inc)
MLM IM (Molecular Medicine SPA)
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Chiara Remondini in Milan at email@example.com
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Angela Cullen, John Lauerman