Roche RHHBY announced that it will acquire clinical-stage biopharmaceutical company Poseida Therapeutics, Inc. PSTX for $9 per share in cash, representing a total equity value of approximately $1.0 billion.

Shares of PSTX are up in pre-market trading on the acquisition news.

Roche’s shares have lost 1.6% year to date against the industry’s growth of 6.4%.

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Details of RHHBY’s Acquisition of PSTX

Per the terms, Roche will initiate a tender offer to acquire all of the outstanding shares of Poseida common stock for $9.00 per share in cash. PSTX’s stockholders would also receive a non-tradeable contingent value right (CVR) for up to an aggregate of $4.00 per share in cash, representing a total deal value of up to approximately $1.5 billion.

The offer price of $9 represents a premium of approximately 215% to Poseida’s closing share price on Nov. 25, 2024.

California-based Poseida’s R&D portfolio includes pre-clinical and clinical-stage off-the-shelf (also referred to as allogeneic) CAR-T therapies across several therapeutic areas, including hematological malignancies, solid tumors and autoimmune disease, as well as manufacturing capabilities and technology platforms.

Poseida’s lead program, P-BCMA-ALLO1, is an allogeneic CAR-T therapy targeting B-cell maturation antigen (BCMA). This candidate has received Regenerative Medicine Advanced Therapy designation for relapsed/refractory multiple myeloma (MM) after three or more prior lines of therapies, and FDA Orphan Drug Designation for MM.

The pipeline also includes P-CD19CD20-ALLO1, an allogeneic dual CAR-T, being evaluated in a phase I study in B-cell malignancies. The acquisition will also add P-MUC1C-ALLO1, an allogeneic CAR-T program currently in phase I in solid tumors.

The non-tradeable CVR will entitle its holders to receive the following contingent cash payments: $2.00 per share in cash, upon the initiation of the first study of a P-BCMA-ALLO1 product for the treatment of any indication (by Dec. 31, 2028), $1 per share in cash, upon the initiation of the study of a P-CD19CD20-ALLO1 product or of a P-BCMACD19-ALLO1 product for the treatment of an autoimmune indication (by Dec. 31, 2034) and $1 per share in cash upon the first commercial sale of a P-BCMA-ALLO1 product for the treatment of any indication (by Dec. 31, 2031).

The transaction is expected to close in the first quarter of 2025, subject to customary closing conditions.

We note that Roche and Poseida had collaborated in 2022 to develop allogeneic CAR-T therapies directed to hematologic malignancies.

RHHBY’s Efforts to Expand Pipeline/Portfolio

Roche is currently looking to augment its pipeline after facing a few pipeline setbacks a couple of years ago. Earlier, Roche acquired privately owned Carmot Therapeutics for $2.7 billion and forayed into the lucrative obesity market. The acquisition added a differentiated incretin portfolio with three candidates — CT-388, CT-996 and CT-868 — to its pipeline.

Roche recently announced an asset purchase agreement with clinical-stage biotechnology company Regor Therapeutics.

Per the agreement, Roche’s Genentech will acquire Regor’s portfolio of next-generation CDK inhibitors for the treatment of breast cancer. Regor will receive an upfront cash payment of $850 million, along with additional milestone payments.

Regor’s most advanced orally administered CDK4/2 inhibitor in the clinic, RGT-419B, will be added to Roche’s pipeline.

RHHBY’s SKYSCRAPER-01 Disappoints

Roche also announced that the late-stage SKYSCRAPER-01 did not achieve its primary endpoint of overall survival at the final analysis.

SKYSCRAPER-01 is a global phase III, randomized, double-blind study evaluating tiragolumab plus Tecentriq compared to Tecentriq alone in 534 patients with PD-L1-high previously untreated, locally advanced unresectable or metastatic non-small cell lung cancer. Patients were randomized 1:1 to receive either tiragolumab plus Tecentriq or placebo plus Tecentriq until disease progression, loss of clinical benefit, or unacceptable toxicity.

Nonetheless, the overall safety profile observed remained consistent with longer follow-up, and no new safety signals were identified.

RHHBY’s Zacks Rank and Stocks to Consider

Roche currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the pharma/biotech sector are Pfizer PFE and Gilead Sciences GILD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Over the past 60 days, Pfizer’s earnings estimates have risen from $2.62 to $2.91 per share for 2024, while that for 2025 has increased from $2.85 to $2.92. PFE’s shares have lost 12.2% year to date.

Pfizer’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 74.50%.

Over the past 60 days, Gilead Sciences’ earnings estimates for 2024 have risen from $3.79 to $4.32 per share, while those for 2025 have increased from $7.24 to $7.38.

Gilead Sciences’ earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 15.46%.

 

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