Vertex Could Offer $250M for This Concert Pharmaceuticals Drug

Concert Pharmaceuticals (NASDAQ: CNCE) shares returned over 60% today, and the stock could continue higher after receiving some bullish news today. Consequently, the stock hit a 52-week high of $18.48 at one point, and it could reach that level again. As of Monday, March 6, 2017, CNCE returned 71.49% over the past month and over 50% YTD.  CNCE had a 30-day average daily volume of 122K, but traders exchanged over 10M shares on Monday.

Here’s a look at CNCE’s recent stock performance:

Concert Pharmaceuticals Performance

About Concert Pharmaceuticals

Concert Pharmaceuticals is an innovative clinical stage biopharmaceutical company that primarily discovers and develops small molecule drugs for genetic and inflammatory diseases, and neurological disorders. The company has multiple drugs in its pipeline, and it could draw the attention of larger companies.

Vertex Paying Concert Pharma up to $250M for Cystic Fibrosis Drug

CNCE rallied over 30% premarket and ended up 62.07% on March 6, 2017. Concert Pharmaceuticals reported its year end 2016 financial results, and there was an extremely bullish piece of news. Consequently, CNCE experienced the meteoric rise due to news of Vertex Pharmaceuticals (NASDAQ: VRTX) potentially acquiring CNCE’s Cystic Fibrosis candidate, CTP-656.

Concert Pharmaceuticals announced it entered into an asset purchase program with Vertex, which could be worth up to $250M. In the agreement, Vertex will acquire all rights to CTP-656 and any other CNCE assets related to cystic fibrosis. VRTX will pay $160M in cash to Concert, upon the closing of all development and commercialization rights to CTP-656. Moreover, based on the approval of CTP-656 in the U.S. and reimbursement in France, Germany or the U.K., Concert Pharma may receive up to an additional $90M. However, CNCE shareholders must approve the agreement and other customary conditions must be met before the acquisition goes through.

Concert Pharmaceuticals CEO Dr. Roger Tung said, “We are excited to continue the progression of our clinical candidates, CTP-656 and CTP-543. These two drug candidates, CTP-656 for cystic fibrosis and CTP-543 for alopecia areata, further our goal of developing innovative treatments with the potential to provide important benefits to patients…I am very pleased that Vertex intends to integrate CTP-656 within their portfolio of investigational and approved CF medicines. We believe this agreement provides the optimal pathway to broadly and rapidly advance the development of CTP-656 for patients.”

Concert Pharmaceuticals Financial Results

In addition to the Vertex acquisition news, CNCE reported its full year 2016 financial results. The company’s earnings results were lackluster, but it did report multiple milestone achievements and business highlights. CNCE reported a diluted EPS loss of $2.28, significantly below the prior year’s diluted EPS. The significant drop in earnings and revenue was primarily due to the one-time $50.2M change of control payment from Auspex Pharmaceuticals. This was a result of Teva Pharmaceuticals’ acquisition.

Moreover, the completion of the Phase I clinical evaluation with Celgene and Jazz Pharma, in 2015, may have attributed to CNCE’s revenue drop.

CNCE Milestones and Highlights

According to Concert Pharmaceuticals, it had numerous upcoming milestones and highlights. The milestones include: CTP-656 Asset Purchase Program with Vertex, CTP-656 Orphan Drug Designation, CTP-656 Phase 2 Development for Cystic Fibrosis in U.S, CTP-543 Phase I Evaluation Completed, CTP-543 Phase 1 Crossover Study, CTP-543 Phase I Pharmacodynamic Results, CTP-543 Phase 2 Initiation and General Counsel Transition. With that in mind, the company has a lot going on and the recent news could push CNCE higher.

Prior to today’s announcement, CNCE released some good news on March 4, 2017.

Concert Pharmaceuticals Announced Phase I CTP-543 Data

Concert Pharmaceuticals announced Phase I single and multiple ascending dose trial evaluating CTP-543 data at the American Academy of Dermatology’s Annual Meeting. CNCE developed CTP-543 to treat moderate-to-severe alopecia areata, a disoder causing the immune system to attack hair follicles. That in mind, consumers could purchase CTP-543, commercially known as Jakafi, for treating certain blood disorders. The recent Phase I results could indicate the further evaluation of patients with alopecia areata.

Concert intends to initiate a Phase IIa clinical trial during the first quarter of 2017. Moreover, the company expects to release topline results by year-end 2017.

Concert Pharma Chief Development Officer stated“We are highly encouraged by the favorable safety and pharmacokinetic profile of CTP-543 observed in Phase 1, and we believe CTP-543 has the potential to become an important treatment option for individuals with moderate-to-severe alopecia areata. There is a significant need to develop an effective treatment for alopecia areata and Concert is at the forefront with CTP-543.”

The Bottom Line

Concert Pharmaceuticals shares closed up over 60% on March 6, 2017. The company released a slew of news over the past few days, and it could be great for CNCE’s stock. The company reached important milestones, and it could increase its development pipeline due to the Vertex acquisition.


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