Jefferies Names Akero Therapeutics, Scholar Rock As Biotech Companies With Takeover Potential, But Retail Isn’t Pleased

Jefferies thinks big pharma companies are "still on the hunt" for deals.

Shares of Akero Therapeutics, Inc. (AKRO) jumped 3% on Friday afternoon after Jefferies said the company has a “promising” takeover potential.

Jefferies thinks big pharma companies are "still on the hunt" for deals as Pfizer (PFE), Biogen (BIIB), Merck (MRK), Eli Lilly (LLY), Gilead (GILD), and others have publicly discussed active business development to "fill voids."

Jefferies named South San Francisco-based Akero among the names it believes hold promise, alongside Scholar Rock (SRRK).

The firm noted that Akero has potential sales of $2 billion to $3 billion and "clean and strong" Phase II data of its lead product candidate, Efruxifermin, in patients with non-alcoholic Steatohepatitis.

As for Scholar Rock (SRRK), Jefferies deems it a promising target with likely approval for its investigational treatment Apitegromab in spinal muscular atrophy by late September.

The company’s upcoming mid-stage trial data of Apitegromab in obesity "could be a clearing event" that could help simplify the stock's valuation, it added.

On Stocktwits, retail sentiment around Akero stayed within ‘bearish’ territory over the past 24 hours, coupled with ‘low’ message volume.

According to data from Koyfin, all 11 analysts covering AKRO rate it a ‘Buy’ or higher. The stock has an average price target of $76.30.

Meanwhile, retail sentiment around SRRK stayed ‘bearish’ over the last 24 hours while message volume took a dip from ‘high’ to ‘normal’ levels.

All of the 10 analysts covering SRRK also rate it ‘Buy’ or higher, with an average price target of $49.67.

While AKRO has nearly doubled its value this year, SRRK is down by over 25%.

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