3 Biotech Stocks That May Have Buy-Out Potential

When investors think about a play in biotechs, often the biggest names probably come to mind first.  Thoughts of Pfizer (PFE), Gilead (GILD) and Novartis (NVS) naturally may be running through one’s head.  But, keep in mind that smaller biotechs could have the ability to deliver just as big of impact to their investors as their larger peers.  With a higher probability of a merger and acquisition by Big-Pharma, this isn’t something that investors should overlook.

Last year was a pretty active year for M&A’s in the sector, with over one hundred transactions reported.  Of the total transactions, fifteen were valued over $1 billion to the sellers, with their combined value nearing $150 billion.  Analysts believe that over the next two years, the number of M&A’s will be closer to that of the all-time highs of 2016, or around 166 per year.

Honorable Mentions: Today, China Biologic Products Holdings Inc. (CBPO), an integrated plasma-based biopharmaceutical company in China, received a $3.9 billion all-cash offer. The company’s U.S.-listed shares spiked 12 percent in premarket trading to $103.01.

The news of a M&A has the potential to send a company’s share price soaring. Here are 3 clinical stage biotech companies that may have what it takes to be bought out by Big-Pharma.

GT Biopharma, Inc. (GTBP)

GT Biopharma is a clinical stage biopharmaceutical company focused on developing immune-oncology products based on its proprietary platforms, TriKE, TetraKE and bi-specific Antibody Drug Conjugates (ADC). GTBP has seven candidates in its pipeline, including OXS-1550, a protein drug generated to target cancer cells, and OXS-3550, a protein conjugate meant to target CD33+ malignancies.  Both drugs have extended from solely from original targets to become a more general therapy for certain cancers.

Notably, the company recently announced it had signed a Material Transfer Agreement (MTA) agreement with a major pharmaceutical company. The agreement details that the pharmaceutical company shall provide GTBP’s lead researcher, Dr. Daniel Vallera, a formulation of its multibillion-dollar widely prescribed oncology drug to be used in the study. Initial pre-clinical work performed by Dr. Vallera suggests a much greater effect when OXS-1550 is given in combination with this established oncology drug.

CV Sciences (CVSI)

CV Sciences operates two distinct business segments: a pharmaceutical drug division which develops and commercializes drugs utilizing synthetic CBD and a consumer product division which manufactures, markets, and retails plant-based CBD products to multiple market sectors. Its initial drug candidate, CVSI-007, has completed preclinical trials and combines CBD and nicotine to support cessation of smokeless tobacco use and addiction.

Last month, he company announced via press release a 203% increase in a revenue and an 11% increase to its retail store count as well as its application to list its common stock on the Nasdaq.  Most recently, the company announced the appointment of Joseph Maroon, MD, FACS to its Board of Directors.

Novan Inc. (NOVN)

Novan, Inc. is a clinical-stage biotechnology company focused on leveraging nitric oxide’s natural antiviral and immunomodulatory mechanisms of action to treat dermatological and oncovirus-mediated diseases. The company currently has four candidates in its pipeline in various stages of clinical trials.  Its candidate is SB204, a once-daily, topical monotherapy for the treatment of acne vulgaris, is currently in phase 3 clinical trials.

Most recently, the company announced via press release promising 1b trial results with SB414 for atopic dermatitis.  It was reported that the clinical efficacy measures were highly correlated with critical and disease-relevant biomarker changes, which can suggest that a topical nitric oxide therapeutic can achieve disease modification.

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