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Highlights from Zacks analyst blog: Pfizer, Arena Pharma, Merck, Jazz Pharm and Sanofi

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Chicago, IL – December 15, 2021 – announces the list of stocks featured on the Analysts Blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: Pfizer Inc. PFE, Arena Pharmaceuticals, Inc. ARNA, Merck & Co., Inc. MRK, Jazz Pharmaceuticals plc JAZZ, and Sanofi SNY.

Here are highlights from Tuesday’s analyst blog:

Does the Pfizer / Arena deal signal robust pharmaceutical merger and acquisition activity in 2022?

Pfizer announced a definitive agreement to acquire Pharmaceutical Arena for $ 100 a share or $ 6.7 billion in an all-cash transaction on Monday. The agreement will add Arena’s lead candidate, etrasimod, a next-generation selective sphingosine-1-phosphate (S1P) receptor modulator, to Pfizer’s inflammation and immunology pipeline.

Etrasimod is in an advanced stage of development for ulcerative colitis (UC). It is also being studied in multiple gastroenterological and dermatological indications. In addition, Arena’s pipeline includes pipeline candidates like temanogrel and APD41, which are under development for cardiovascular disease.

While shares of Pfizer rose 4.6% on Monday, shares of Arena rose 80.4% in response to the news of the merger. Pfizer stock has risen 55.6% this year so far, compared to an 18.5% increase for the industry.

The buyout offer was accompanied by a significantly high premium of 100% of the Arena Friday closing price of $ 49.94. The Arena deal is Pfizer’s largest after acquiring Array BioPharma for $ 11 billion in 2019.

In 2021, mergers and acquisitions activity in the pharmaceutical and biotech sectors recovered after a lackluster 2020 when deal-making was affected by the disruption caused by the pandemic. Although deals were not as numerous as in 2018 and 2019, most of the M&A deals in 2021 were valued at over $ 1 billion. Some of the most important transactions have been Merckthe acquisition of Acceleron Pharma for $ 11.5 billion, Pharmaceutical Jazz” acquisition of GW Pharmaceuticals for $ 7.2 billion and Sanofipurchase of Translate Bio for $ 3.2 billion.

Merck’s pipeline was strengthened by the addition of a promising Phase III candidate for the pulmonary arterial hypertension pipeline, sotatercept, following the acquisition of Acceleron.

Jazz Pharmaceuticals’ neuroscience portfolio has been strengthened with the addition of two drugs – Epidiolex and Sativex (nabiximols) – following the aforementioned acquisition.

Sanofi’s efforts to develop transformative vaccines and therapies using mRNA technology gained momentum following the acquisition of Translate Bio.

The Pfizer-Arena deal has raised hopes of a significant resumption of M&A activity in 2022. The deal is seen as the first of many to come in 2022, as major Drug makers have huge amounts of money and borrowing power to make deals. Since it takes several years and millions of dollars to develop new therapies from scratch, large pharmaceutical companies routinely buy innovative small and mid-cap biotech companies to expand their pipelines and drive growth.

Fast growing and lucrative markets such as oncology and cell and gene therapy are expected to remain priority areas for M&A activity. Importantly, after the success of the mRNA vaccines from Pfizer and Moderna, mRNA technology has already started to gain a lot of attention.

It is important to note that drugmakers like Pfizer, J&J and Moderna have enormous cash flow resources, benefiting from large revenues from their COVID-19 vaccine sales. Pfizer, could also make another acquisition announcement next year, given strong sales of its COVID-19 vaccine Comirnaty and potentially its oral antiviral pill Paxlovid, which is expected to receive emergency approval soon.

While all of the 2021 deals were relatively smaller than previous mega-mergers of AstraZeneca-Alexion, Bristol-Myers-Celgene and AbbVie-Allergan, a sizable deal, at $ 50 billion or more, cannot be ruled out in 2022.

Pfizer and Arena Pharma both have Zacks Rank 3 (Hold). You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

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Each was selected by a Zacks expert as the # 1 favorite stock to earn + 100% or more in 2021. Previous recommendations climbed + 143.0%, + 175.9%, + 498.3% and + 673.0%.

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Sanofi (SNY): Free Stock Analysis Report

Pfizer Inc. (PFE): Free Inventory Analysis Report

Arena Pharmaceuticals, Inc. (ARNA): Free Stock Analysis Report

Merck & Co., Inc. (MRK): Free Stock Analysis Report

Jazz Pharmaceuticals PLC (JAZZ): Free Stock Analysis Report

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