Shares of the clinical-stage cancer specialist Checkpoint Pharmaceuticals (CMPI) are up by a handsome 328% as of 1:41 p.m. ET Tuesday afternoon. The drugmaker's shares are racing higher today in response to a $250 million all-cash buyout offer from Regeneron Pharmaceuticals (REGN 1.88%).
Regeneron's tender offer of $10.50 per share represents a whopping 332% premium relative to Checkpoint Pharmaceuticals' closing price Monday afternoon. The two companies expect the transaction to close by the middle of 2022.
Regeneron's interest in Checkpoint Pharmaceuticals reportedly centers around the early-to-mid-stage cancer-drug candidate vidutolimod. Vidutolimod is an immune activator that expands T cell populations and subsequently induces them to attack tumor cells. The drug's novelty as an anticancer immunotherapy is its potential to significantly ramp up the efficacy of checkpoint inhibitor therapies in patients with advanced disease.
The drug is currently being trialed across a wide variety of studies as part of a combo therapy for indications such as melanoma, non-melanoma skin cancers, and head and neck cancer. Even so, vidutolimod is still fairly early on in its development, meaning that it is unlikely to become commercially available for at least a few more years.
Although Regeneron's buyout of Checkpoint Pharmaceuticals isn't exactly a needle mover for the biotech behemoth, this transaction could have far-reaching ramifications for the industry as a whole. Biotech valuations have been cliff diving ever since the start of the fourth quarter of last year.
Regeneron's willingness to pay top dollar for an early-stage cancer asset, however, may reignite interest in the space among investors. Most of the top biopharmaceutical companies, after all, have plenty of cash to spend on similar deals.