Decibel Therapeutics hears it may be a takeout target after Lilly acquisition of Akouos
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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.