Vertex's Alpine Acquisition: Unpacking Analyst Predictions on Povetacicept's Potential Impact

On Wednesday, Vertex Pharmaceuticals Incorporated VRTX agreed to acquire Alpine Immune Sciences Inc ALPN for $65 per share or approximately $4.9 billion in cash. 

Evercore notes the deal as a surprise move as it is unusual for Vertex, which has often been critiqued for capital allocation, building up piles of cash amounting to $13.7 billion before the acquisition. 

The analyst notes it as a solid acquisition and aligned with Vertex’s emerging footprint in nephrology following the advancement of inaxaplin in APOL1-mediated kidney disease and early-stage candidate VX-407 for autosomal dominant polycystic kidney disease. 

Related: Vertex’s Next-Generation Cystic Fibrosis Program Shows Efficacy With Reduced Burden, Provides Growth Opportunity: Goldman Sachs.

Evercore analyst sees Alpine’s lead molecule, povetacicept (ALPN-303), to be fourth to market in this class behind Otsuka’s sibeprenlimab, Vera Therapeutics Inc VERA atacicept, and Novartis AG’s NVS zigakibar.

Evercore analyst writes that Povetacicept alone can add over $5 billion to the top line, and it models conservatively for indications beyond IgAN. 

The analyst upgraded the stock from In-line to Outperform, with a price target of $438.

BofA writes, “We think Vertex is putting its money to good work, particularly given its strong balance sheet where investors have been waiting for BD to create additional “encores” to its Cystic fibrosis (CF) pipeline. And while this is the first acquisition for Vertex of this size in quite some time, management stressed this was the right deal at the right time and to not make any readthroughs for future acquisitions.”

BofA maintains the Buy rating with a price target of $550 as the Alpine acquisition further bolsters Vertex’s late- and early-stage clinical pipelines.

William Blair suggests that Povetacicept’s potential extends beyond IgAN, potentially leading to it becoming a multibillion-dollar product. Additionally, they anticipate Vertex engaging in business development to broaden its pipeline beyond cystic fibrosis.

Price Action: VRTX shares are up 1.29% at $402.71 on the last check Thursday.

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