Could this stock be the next biotech buyout target?

existVertex Pharmaceuticals（Nasdaq ResonanceStock Code: VRTX )move the flame of a bird (e.g. chili)Alpine Immunologyfirms(NASDAQ resonance stock code: ALPN) The biotech sector has received more attention than usual following the takeover offer.

Vertex recently made a $65 per share, or $4.9 billion in cash, offer for Alpine Immunology, whose stock closed at about $39 per share on April 9, the day before the announcement.

Government regulators rarely try to prevent large pharmaceutical companies from acquiring clinically active biotechnology companies. This means that Alpine's shareholders will likely increase their investment by about $67% by the time the transaction closes, probably in a few months.

For biotech stocks in the pre-commercialization phase, licensing deals and outright acquisitions are commonplace. This is because new drugs that come to market are often disappointing when run by untested salespeople. In addition, established drug companies must continually look for new sources of revenue to replace those lost to competition from imbibers.

Vera Therapeuticsfirms(NASDAQ: VERA)Vera Therapeutics is a clinical biotechnology company developing a drug candidate similar to that of Alpine, which was acquired by Vertex at a premium of 67%. Let's take a quick look at Vertex and Alpine to see if Vera Therapeutics could be the next company to receive a lucrative offer.

Why Vertex wants to buy Alpine

According to the Centers for Disease Control, about 37 million American adults have chronic kidney disease. Diabetes and high blood pressure are the main causes, but a condition called immunoglobulin A nephropathy (IgAN) is found in about 1 in 10 kidney biopsies.

IgAN is a major cause of kidney failure, but there is a lack of effective treatments to address the root cause of the problem; Vertex acquired Alpine because it believes that Alpine's lead drug candidate, povetacicept, could become a blockbuster drug for the treatment of IgAN (with annual sales in excess of US$1 billion).

Povetacicept is a dual antagonist that acts on proteins called BAFF and APRIL, which play key roles in IgAN and other autoimmune diseases.

In a few years, if povetacicept for IgAN is successfully launched, Vertex's $4.9 billion price tag for Alpine will look like a bargain. Considering the potential expansion of treatments for related diseases such as lupus erythematosus, it's no wonder that Vertex made the unorthodox decision to wholly acquire Alpine.

Next Biotech Acquisition?

Alpine isn't the only biotech startup developing a real-world nephropathy treatment for APRIL and BAFF, and Wall Street analysts were a bit surprised that Vertex didn't choose Vera Therapeutics.

In January, Vera presented 72-week data from Origin, a study that enrolled 376 IgAN patients. In the Phase 2b portion of this pivotal study, patients treated with Acetazepam experienced a sustained reduction in symptoms of kidney damage. Most patients who were randomly assigned to receive placebo at the start of the trial chose to receive apazepam at week 36, and this crossover group demonstrated similar treatment.

Vera, which is a few months ahead of Alpine on the development timeline, has already begun enrolling patients for the Phase 3 portion of the Origin study; enrollment is expected to be completed in the second half of the year. Meanwhile, Vertex and Alpine expect to begin Phase 3 trials of povetacicept in the second half of this year.

Is Vera Therapeutics a good stock to buy right now?

Vertex believes that povetacicept is a better blocker of BAFF and APRIL than atacicept or other similar candidates, and even if Vertex is right about povetacicept, there may be room for atacicept to rise.

Whether or not Vera becomes the next biotech to be acquired, its market capitalization of $2.3 billion at recent prices seems like a reasonable valuation, and the Origin study is likely to yield third-period results by the end of 2025. If the trend we have already seen in the Phase 2b study continues, then the company's share price could go through the roof. That's assuming no major drug company makes a lucrative offer for Vera first.

Vera Therapeutics still has a lot of things that can go wrong, so no one should use it as a cornerstone of their investment portfolio. However, if you have a high risk tolerance, you may want to take a small gamble.

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Cory Renauer has no position in any of the stocks mentioned above.The Motley Fool holds a recommendation for Vertex Pharmaceuticals.The Motley Fool has a disclosure policy.

Could This Stock Be the Next Biotech Buyout Target? This post was originally published by The Motley Fool.