Following the Q1 earnings conference call, BMO Capital analyst Alex Arfaei says he believes Merck (MRK) is preparing investors for a mid-sized acquisition in the $10B-plus range. This puts Medivation (MDVN) as a potential target for the drug giant, Arfaei tells investors in a research note. Medivation today again rejected Sanofi's (SNY) attempt to begin takeover negotiations. Merck would be competing with a number of other large cap Biopharma companies for Medivation, which could result in a higher than expected deal price, the analyst contends. He believes Merck is likely to target mid-cap biotechs for an acquisition with the sector down 24% year-to-date. Arfaei still views the Keytruda lunch cancer data readout and approval as a "significant catalyst" by mid-year for Merck shares. He keeps an Outperform rating on Merck with a $62 price target. The stock is down $1.00 to $53.81 in midday trading.

After IGM Biosciences (IGMS) announced that the company's exclusive worldwide collaboration agreement with Sanofi (SNY) to create and develop IgM agonist antibodies will now focus exclusively on immunology and inflammation targets, Stifel analyst Stephen Willey said the firm believes the re-focusing of the collaboration away from oncology and exclusively to the three, yet-to-be-disclosed IAI targets "removes some longer-term economic optionality," but ultimately doesn't change the firm's thesis on the stock. The firm, which adds that Sanofi's decision aligns with its continued prioritization of IAI development opportunities and doesn't reflect anything aplitabart-related and notes that IGM now regains full control of these oncology programs and could potentially re-monetize these assets via future partnerships, would be buyers on related weakness. Stifel has a Buy rating and $25 price target on IGM Biosciences shares.