2024-04-11| M&A

Vertex Pharmaceuticals Makes $4.9 Billion Bet on Kidney Disease Treatment through Alpine Immune Acquisition

by Bernice Lottering
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Vertex Pharmaceuticals Incorporated announced its acquisition of Alpine Immune Sciences, Inc. for $4.9 billion in cash.

On Wednesday, Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) announced its acquisition of Alpine Immune Sciences, Inc. (Nasdaq: ALPN), along with its potential kidney disease treatment, for $65 per share, totaling approximately $4.9 billion in cash. This transaction, slated to finalize in the second quarter, grants Vertex access to povetacicept, an experimental therapy targeting IgA nephropathy (IgAN), scheduled to undergo Phase 3 trials by year-end. This acquisition, marking the largest in Vertex’s 35-year history, shows the company’s strategic expansion into the realm of kidney disease therapeutics.

One of 2024’s Largest M&A Deals Takes Center Stage

Each share of Alpine is valued at $65 under the deal, marking a significant premium of approximately 67% to Alpine’s closing stock price on Tuesday. The decision follows reports that Alpine was exploring strategic options, including a potential sale, after attracting takeover interest. In response to the news, Alpine’s shares surged by 36% in after-hours trading, while Vertex Pharma saw a slight decline of about 1%.

According to the merger agreement, Vertex will purchase Alpine for $65 per share in cash, totaling an equity value of around $4.9 billion, or roughly $4.6 billion net of estimated cash acquired. A Vertex subsidiary will initiate a cash tender offer to acquire all outstanding shares of Alpine common stock. The gene therapy developer will gain access to Alpine’s povetacicept, currently in mid-stage development for treating IgAN, a disease wherein aggregates of antibodies accumulate in the kidneys. The drug is scheduled for evaluation in a late-stage trial in the latter half of 2024. Povetacicept functions by targeting BAFF (B cell activating factor) and APRIL proteins, known contributors to the onset of various autoimmune and antibody-related diseases.

Alpine’s Contribution to Kidney Disease Treatment

Alpine’s drug, povetacicept (ALPN-303), functions as a potent dual antagonist targeting BAFF  and APRIL (a proliferation inducing ligand). Throughout Phase 2 trials, povetacicept has demonstrated notable efficacy potential in treating IgAN, a severe autoimmune kidney disease characterized by various symptoms including blood in urine, swelling in extremities, and recurrent upper respiratory infections. With the potential to progress to end-stage renal disease, IgAN lacks approved therapies addressing its underlying cause. As the primary cause of idiopathic glomerulonephritis globally, IgAN affects approximately 130,000 individuals in the U.S alone.

Povetacicept’s dual BAFF/APRIL antagonist mechanism suggests potential applicability for patients with diverse autoimmune kidney disorders, including membranous nephropathy and lupus nephritis, as well as autoimmune cytopenias. Ongoing clinical investigations aim to evaluate povetacicept’s efficacy in both renal indications and autoimmune cytopenias. Phase 3 clinical trials for povetacicept are scheduled to begin in the latter half of 2024.

IgAN has attracted attention from both biotech and pharmaceutical companies, with Novartis acquiring Chinook Therapeutics and its experimental IgAN treatment earlier this year. Novartis is concurrently advancing iptacopan, a drug targeting various kidney-related conditions. In October, the Swiss pharma reported significant reductions in urine protein levels among patients treated with iptacopan, indicating positive kidney health outcomes. The company intends to seek regulatory approval in the United States this year.

Diversifying Beyond Cystic Fibrosis

For years, Vertex Pharmaceuticals has sought avenues to expand beyond its highly successful cystic fibrosis medications, which have propelled it to the forefront of the biotech sector. This strategy has led the company in various directions, including research into pain management, sickle cell disease through CRISPR/Cas9 technologies, Type 1 diabetes, and addressing rare lung conditions such as alpha-1 antitrypsin deficiency.

The kidney has emerged as a key focus for Vertex’s expansion efforts. Recent announcements reveal plans to advance inaxaplin, a therapy targeting kidney disease associated with mutations in the APOL1 gene, into late-stage clinical trials. Now, with the acquisition of Alpine Immune Sciences, Vertex stands positioned to enhance its role in kidney disease treatment.

“Acquiring Alpine represents a significant stride in advancing our initiatives,” Reshma Kewalramani, CEO of Vertex, emphasized during a recent investor call. “We view this purchase as an ideal match, offering precisely the assets and developmental stage we need to augment our endeavors.”

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