This morning, shares of pharma firm Altimmune (NASDAQ: ALT) spiked 14% in pre-market trading on news of a deal to acquire Spitfire Pharma. The Maryland-based company, founded in 1997, also works through subsidiaries PharmAthene UK Limited and Pharmathene US Corporation.
Spitfire is in the process of researching treatment for NASH or non-alcoholic steatohepatitis.
A cited payment of $5 million to Spitfire holders precedes further payouts based on regulatory, clinical and sales-based milestones, according to Tomi Kilgore at MarketWatch.
“The deal is expected to close in July,” Kilgore writes. “Spitfire’s NASH product candidate SP-1373 will be renamed ALT-801.”
The pre-market spike reverses a clear trend where the value of ALT has been nearly cut in half since a spike to around $4.50 in March of this year.
Now, with the acquisition, there’s the potential for further gains, partially based on the clinical need for a NASH treatment product. With a market cap of around $33 million, according to Google charts, ALT is not a big blue-chip – SeekingAlpha calls it a “thinly traded nano cap” in its coverage of the current deal – but the acquisition news is putting ALT on the map.
Treatment options for this type of liver problem, which can lead to liver cirrhosis and cancers, seem rare on the market, although some other firms are also acquiring research parties working on the same basis.
“NASH is a significant unmet need,” said Vipin K. Garg, Ph.D., President and Chief Executive Officer of Altimmune in a press statement. “There are no approved treatments available, and prevalence is growing worldwide as a consequence of an expanding obesity epidemic. Compelling preclinical data generated by Spitfire suggests that ALT-801 could reverse obesity, a primary cause of NASH, thereby reducing excess liver fat, inflammation and fibrosis associated with the disease … The addition of this exciting product candidate to our portfolio is a transformative transaction for Altimmune.”
Eventually, it may come down to multiple biopharmaceutical conglomerates duking it out over product offerings for reducing inflammation and fibrosis to treat NASH but the prominence of the Spitfire acquisition is currently pushing ALT up on significant volume. This is one to watch in the healthcare market, especially for drug efforts to curb obesity-related issues that are common maladies.
