Biotech Growth (BIOG) has bagged its second bid for a company in a month with Forte Biosciences, a US immunological drug developer accounting for 3% of its portfolio, agreeing to a $2.2bn cash offer from Argenx SE, a Belgian-Dutch pharmaceutical company.
Argenx yesterday agreed to pay $77 a share, 40.5% more than Forte’s closing price on Friday and $71.50, or nearly 14-times, more than the $5.55 BIOG paid in November 2024 for its stake when fund manager Orbimed was invited to take part in a private placing to help fund the development of its treatment for coeliac disease.
The drug, FB102, has passed two clinical trials that prove its application to coeliac sufferers as well as vitiligo, a skin condition that produces milky-white patches due to the loss of natural pigment. BIOG said there could be applications for other autoimmune diseases in the future.
The increase in Forte will be reflected in BIOG’s next net asset value statement due this afternoon with QuotedData’s James Carthew estimating a 1.2% boost (see below).
This takeout of Forte is the ninth merger or acquisition (M&A) in a year to benefit BIOG, whose share price has more than doubled in the past 12 months in a rebound from a three-year bear market.
Earlier this month the £309m investment trust saw US pharmaceuticals giant Eli Lilly snap up psychedelic drugs company AtaiBeckley for $2.8bn, or $6.75 a share. Including possible “milestone” payments, Eli could end up paying $3.8bn, or 73% more than AtaiBeckley’s pre-deal valuation for what was a 1.1% holding for BIOG.
The other bids have been for Avidity Biosciences, Cidara Therapeutics, Amicus Therapeutics, Apellis Pharmaceuticals, Kalvista Pharmaceuticals, Esperion Therapeutics and Nuvalent.
Fund manager Geoff Hsu said: “This transaction is the latest in a series of M&A outcomes across the portfolio and further demonstrates how our focus on identifying and investing in innovative small and mid-cap biotechnology companies developing differentiated, best-in-class therapies can deliver substantial long-term returns for shareholders.”
BIOG shares eased 3.75p to £16.54.
Our view
James Carthew, head of investment company research at QuotedData, said: “Another decent NAV uplift (about 1.2%) for Biotech Growth as this extraordinary run of biotech bids continues. In this case, it is one biotech firm buying another – Argenx is a holding for RTW Biotech (RTW).”
