In a March 2 research note, BTIG analyst Robert Hazlett reported that Forty Seven Inc. (FTSV:NASDAQ) is being acquired by Gilead Sciences Inc. (GILD:NASDAQ) in an all cash deal. Closing is expected in Q2/20.
As a result of the announcement, BTIG increased its target price on Forty Seven from $40 per share to $95.50, the price Gilead will pay for the company, which amounts to about $4.9 billion. This reflects "a material premium over even our prior $60.48 takeout valuation, likely reflecting a very competitive process," Hazlett commented.
The California-based biopharmaceutical firm is developing anti-CD47 antibodies that will stimulate the immune system and that could be used in various cancers.
Gilead reportedly pursued Forty Seven for three key reasons, Hazlett indicated. The company's margrolimab (5F9) is at an advanced stage in the clinic, its myelodysplastic syndrome (MDS) and acute myelogenous leukemia (AML) programs combining margrolimab and azacitidine are progressing and potential exists for rapid U.S. Food and Drug Administration approval of the antibody. Thus, Hazlett deduced, the Phase 1b updates on the MDS and AML programs, to be provided at the American Society of Clinical Oncology's annual meeting from May 29 to June 2, 2020, are expected to be favorable.
Hazlett noted the two catalysts for Forty Seven in Q1/20. One, the biopharma plans to start a single-arm, 100-patient trial of 5F9 in diffuse large B-cell lymphoma to evaluate overall response rate and durability. Interim data from this trial are expected in H2/20.
Two, the company will announce results from the Phase 1b ovarian cancer trial evaluating combination therapy, 5F9 and avelumab, likely the first clinical data available for 5F9 plus an anti-PD-L1. "Positive safety and efficacy data could support broader discussions for collaborations in ovarian and other cancers," noted Hazlett.
BTIG has a Buy rating on Forty Seven.
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Disclosures from BTIG, Forty Seven Inc., March 2, 2020
Analyst Certification I, Robert C. Hazlett, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report.
I, James Colby, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report.
The research analyst(s) responsible for the preparation of this report receives compensation based upon a variety of factors, including the quality and accuracy of research, internal/client feedback, and overall Firm revenues.
Company–Specific Regulatory Disclosures
BTIG LLC expects to receive or intends to seek compensation for investment banking services in the next 3 months from: Forty Seven, Inc. (FTSV)
BTIG LLC has received compensation for investment banking services in the past 12 months from: Forty Seven, Inc. (FTSV)
BTIG LLC had an investment banking services client relationship during the past 12 months with: Forty Seven, Inc. (FTSV)
