Decibel Therapeutics ( NASDAQ: DBTX ), which is focused on hearing loss treatments, is up 25% in Tuesday morning trading after Eli Lilly ( NYSE: LLY ) said it would acquire fellow hearing therapy company Akouos ( NASDAQ: AKUS ) .
One of Decibel's ( DBTX ) most anticipated programs is DB-OTO, a gene therapy designed to restore hearing in those born with significant hearing loss due to a mutation of the OTOF gene. On Monday, the US FDA cleared an IND application to start a phase 1/2 trial .
The candidate is the first developed as part of a collaboration with Regeneron Pharmaceticals ( NASDAQ: REGN ) that was signed in 2017 and extended last year .
That partnership has some hypothesizing that Decibel could be a takeout target. Baird analyst Jack Allan noted that Akouous' ( AKUS ) pipeline of otology treatments is similar to those under development by Decibel ( DBTX ).
"Moving forward, with Decibel having already produced strong data from its otoprotective therapy DB-020, and with DB-OTO (otoferlin gene therapy) set to enter the clinic in the coming months, we believe that there is potential for Regeneron ( REGN ) or another large biotech/pharmaceutical player to look to acquire Decibel in the coming months," Allan wrote.
DB-020 is in phase 1b for cisplatin-induced hearing loss.
Seeking Alpha's Quant Rating views Decibel ( DBTX ) as a hold.
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Decibel Therapeutics hears it may be an takeout target after Lilly acquisition of Akouos