Puma Biotechnology Valuation Increases, Helping Takeover Prospects

The increasing valuation of Puma Biotechnology Inc. is stoking optimism that the chief executive officer of the company will be able to sell the 2nd straight drug developer to a reputed pharmaceutical company. The experimental breast-cancer treatment of Puma has been favored throughout and the shares fetched $836 million because of that, within less than 11 months of trading. This is more than any other US peer of the company that had no sales in the last year. 

Since last April, the stocks have doubled for the company. However, Puma has only recently started to enroll patients in the final stage of testing neratinib. The same was licensed from PFE in 2011.

Alan H. Auerbach, the CEO of Puma sold his previous venture for a whopping price of $1 billion to Johnson & Johnson. The previous venture was named as Cougar Biotechnology Inc. Incidentally, the US regulators approved the prostate-cancer drug of Cougar Biotechnology, thereby making it a product worth billion dollar. According to Cowen Group Inc., if any company considers buying Puma as it has high prospects, it should wait until the phase 3 is finished. On the other hand, UBS AG believes that Puma can start fetching about $40 for each share within some quick time frame. Incidentally, that is 37% more than the yesterday’s price of the company.

According to the analyst of Cowen, Eric Schmidt, the management team of Puma Biotechnology has made many people a lot of cash earlier and it is expected to do the correct thing for investors, yet again. He added that Auerbach had bought a cheap product from Pfizer and so far, he seems to be doing absolutely awesome with it.

Cougar Biotechnology was established in 2003 by Auerbach and he sold the same company in 2009 to Johnson & Johnson. At that point of time, its experimental prostate-cancer treatment abiraterone acetate was still under development. The drug is now marketed as Zytiga and it is currently used in patients who had already gone through chemotherapy or are at late-stage prostate cancer. Incidentally, Zytiga has won European approval as well.

In an earlier statement, Auerbach stated that he sees 3 options for Puma at this point of time. He can sell the company, license neratinib to some other business or try to market it, if it gets the required approval from the regulators.