Vertex Stock in Focus After Deal to Buy Alpine Immune For $4.9B—Key Level to Watch

Vertex Pharmaceuticals (VRTX) will acquire clinical-stage immunotherapy company Alpine Immune Sciences (ALPN) in a deal valued at around $4.9 billion, both companies said Wednesday.

The transaction, which will give Vertex access to the biotech’s protein-based immunotherapies to treat autoimmune and inflammatory diseases, values each Alpine share at $65, representing a 38% premium to Wednesday’s closing price of $47.04.

Following the announcement, Vertex shares fell 1.2% to $393.02 in after-hours trading, while Alpine shares soared 36.5% to $64.20.

The acquisition adds value to Vertex’s gene therapy credentials by providing access to Alpine’s mid-stage development antagonist povetacicept to treat a kidney autoimmune disease called IgA nephropathy (IgAN). Povetacicept, which is expected to undergo late-stage clinical trial evaluation in the second half of this year, works by inhibiting proteins that play key roles in B cell activation and survival. IgAN affects about 130,000 people in the United States, Vertex said.

“Alpine is a compelling strategic fit for Vertex and furthers our ambition of using scientific innovation to create transformative medicines targeting serious diseases with high unmet need in specialty markets,” said Vertex CEO and President Reshma Kewalramani in a statement.

The companies expect the deal to close in the second quarter of 2024, subject to conditions. An Alpine regulatory filing disclosed that it may be required to pay Vertex a fee of $173 million on termination of the deal.

Although Vertex shares remain in a long-term uptrend as quantified by the stock trading above the 200-week moving average, the price has retraced since topping out in late January. 

Amid heightened volatility arising from the company’s acquisition news, investors should closely monitor the $390 level—an area on the chart where the stock may find buying interest from an uptrend line extending back to the October 2021 low, which sits in close proximity to the rising 50-week moving average. A breakdown below this closely watched level could open the door for a decline to lower support around $300.

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As of the date this article was written, the author does not own any of the above securities.