My guess: Pfizer or Novartis.
I have just returned from a vacation on the beautiful island of Taiwan that also allowed me, finally away from my laptop, to reflect on RNAi Therapeutics and the financial markets. At the end of it (I just returned four hours ago), I was quite positive that the markets for high-risk/hi-reward investments such as RNAi Therapeutics have just hit rock bottom and that the survivors of the shake-out are poised to be among the best performers in the stock market as the dead money sitting in large companies’ coffers and the deceptively safe gold and bond market will find its way back again into small biotech companies in search of higher yields as a double-dip recession appears less likely by the day. Combined with the upcoming $100M Novartis decision and clinical data from particularly the SNALP/LNP-based trials (TKM-ApoB, ALN-TTR…), this should indeed be a very good time to be invested in RNAi Therapeutics.
If you follow this blog over time, you will have noticed that I have become much more bullish about Silence Therapeutics as it may well be a valuable addition to the RNAi Therapeutics efforts of a few Big Pharma companies. Today then, the company announced that the company has received an ‘approach which may or may not lead to an offer for the company’, with details yet to be released.
Novartis is such a Big Pharma that might benefit from a Silence acquisition and maybe not so coincidentally has also recently expressed some confidence in Silence Therapeutics RNAi platform when it optioned an RNAi clinical candidate that is based on the Silence Atu-RNAi trigger design. By exercising the $100M Alnylam option and complementing the RNAi trigger IP position with some of the valuable pieces controlled by Silence and that have recently started to issue, Novartis may well end up with one of the strongest, if not THE strongest position in RNAi triggers. It is also my feeling that although Novartis has apparently been on an RNAi Therapeutics hiring campaign, its technical expertise still lags behind that of pure-play companies such as Silence Therapeutics.
An acquisition of Silence Therapeutics may allow Pfizer, which like Novartis has also invested serious money in a clinical candidate based on the Atu-siRNA platform, to finally formulate its RNAi trigger strategy and get a start in delivery, too. In general, Pfizer to me has been a bit directionless in RNAi Therapeutics and risks missing its stated goal of an in-house RNAi Therapeutics IND in the near-term. Silence Therapeutics may help them remove a lot of the question marks over their RNAi efforts.
The offer price? Considering the recent share price before the offer (4.6p-7.5p) in light of the valuation of the merger with Intradigm (slightly above 20p just 8 months ago) and the stage of Silence Therapeutics' technology and IP position (increasingly solid in the RNAi trigger arena, encouraging in delivery), I would consider an offer price in the 20-25p range to be acceptable to Silence Therapeutics.
If you haven’t invested in Silence Therapeutics, I wouldn’t be too disappointed in the possibly missed opportunity here. First of all, it’s not a done deal yet, and more interestingly there are a few other companies out there whose shares should catch fire if a solid buy-out offer indeed emerges. Shares in Tekmira, RXi Pharmaceuticals, and mdRNA may be the primary beneficiaries due to their low market caps and because they might be considered by the markets to potentially be of similar strategic value to Big Pharma. Shares of Alnylam should also respond quite positively to such news, because it would confirm Big Pharma’s strong interest in RNAi Therapeutics and Alnylam being the bellwether of RNAi Therapeutics.
Please let it be true, please… J