Investors who have invested in the biotechnology company Cytokinetics are currently experiencing a rollercoaster of emotions. The company caused a sensation a month ago with successful data from an experimental drug for the treatment of the congenital heart disease „hypertrophic cardiomyopathy“. Coupled with takeover speculation, the stock skyrocketed from $35 to a peak of $108.

But it appears that the imminent deal with pharmaceutical giant Novartis will not be happening after all. The Swiss pharmaceutical company has announced its withdrawal from the acquisition, which has caused a significant blow to the Cytokinetics stock.

About Cytokinetics Cytokinetics is a biotechnology company founded in 1998 with its headquarters in South San Francisco, California. The company is developing a pipeline of therapies that „can improve the lifespan of people with cardiovascular and neuromuscular diseases with impaired muscle function,“ according to the company’s website. The main target indications are heart failure, hypertrophic cardiomyopathy (HCM), and amyotrophic lateral sclerosis.

Founder and CEO Robert Blum previously worked at Amgen. Blum’s original vision was to build a company specializing in the management of protein-protein interactions. However, the development of drugs for the treatment of muscle and cardiovascular diseases quickly became the focus of Cytokinetics.

Analysts see great potential The company has not yet generated significant revenue (Q3 2023: $0.38 million). The latest quarterly loss was $129 million, but analysts see great potential. Analysts estimate Cytokinetics‘ revenue for their cardiomyopathy drug to reach up to $3.6 billion by 2032.

Novartis withdraws from the deal Now, onto the takeover speculation: Last week, the Wall Street Journal reported that Novartis was close to buying Cytokinetics. Even though the Swiss company did not comment on the rumors, media outlets speculated on a possible purchase price of over $10 billion for the company.

According to the report, Cytokinetics had initiated a sales process, and another buyer could enter or Novartis might express renewed interest. Other potential interested parties mentioned were AstraZeneca or Johnson & Johnson.

Amgen also among possible interested parties On Thursday, new speculations emerged. According to the financial website Betaville, biotech giant Amgen has also joined the potential bidders. Cytokinetics is reportedly offering between $130 and $145 per share, according to Betaville, citing sources familiar with the matter. The two companies have a history together as the larger biopharmaceutical company terminated a development and collaboration agreement for the small molecule cardiac myosin activator omecamtiv mecarbil in May 2021, an agreement originally signed in 2006.

Stock comes back down The news of Novartis‘ withdrawal has dampened the Cytokinetics stock. The stock plummeted 28% and is currently trading at $85.60 (closing price: January 12, 2024). This price is significantly lower than the rumored acquisition price that was circulating in the media. One thing is certain: the volatility of the stock is likely to remain exceptionally high for the time being.