Shares of Voyager Therapeutics (NASDAQ:VYGR) jumped as much as 13% today after the nascent field of gene therapy saw yet another acquisition this week. Biogen offered to buy Nightstar Therapeutics for roughly $877 million. The deal would give the biotech giant access to a promising late-stage gene therapy candidate aimed at treating a rare eye disease.
The proposed acquisition follows last week's news that Roche will acquire the eye-targeting gene therapy portfolio of Spark Therapeutics for a cool $4.8 billion. While Voyager Therapeutics isn't focused on gene therapies for vision-related ailments, investors are speculating the biopharma's recent deals with leading pharma companies could make it the next acquisition target among its peers.
As of 3:36 p.m. EST on Monday, the stock had settled to an 11% gain.
There's no denying that the field of gene therapy is hot to the touch right now. The Spark Therapeutics deal sent shares of many early-stage gene therapy and gene editing companies soaring last week. The Nightstar Therapeutics deal is lifting shares of many companies again, although with a little less pull this week.
Why are investors so excited about Voyager Therapeutics? Well, in late January, it announced a huge partnership with Neurocrine Biosciences. It followed that up by announcing a sizable deal with AbbVie in late February. The two deals combined landed the gene-therapy focused biotech $230 million in cash and equity investment up front, the potential to receive over $1.95 billion in milestone payments, and the potential to earn royalties on future sales.
Voyager Therapeutics can also expand its partnership with AbbVie to other clinical candidates. In that scenario, it could earn an additional $728 million in milestones per candidate and "up to a total of" $500 million in commercial milestones (it's not clear if that's per candidate or for all candidates combined).
Given the heightened appetite for deals in the gene therapy space, the enormous potential outlined in recent deals, and the fact the company trades at a market cap of just $600 million today, investors are thinking Voyager Therapeutics might be a good takeover candidate. While it's always fun to speculate, investors shouldn't get too far ahead of themselves.
Gene therapies don't have a great track record in the clinic. And although Voyager Therapeutics has significantly de-risked its pipeline, the gene therapy candidates involved in recent deals have to deliver in human studies before anyone can begin penciling in milestone payments. Simply put, given the early-stage nature of the field, gene therapy and gene editing stocks might not pan out quite like investors are hoping.