Biotechs like it are clearly valuable to strategic acquirers.
Dyne Therapeutics (DYN +41.18%) had a Monday neither it nor its investors will ever forget. This wasn’t of its own making, however, as a premium-priced buyout of a peer was attracting serious interest in its own equity. This propelled the stock to a more than 41% gain on the day, mirroring the trajectory of that soon-to-be-acquired fellow biotech.
Affinity for Avidity
That peer is Avidity Biosciences, which has agreed to be purchased by pharmaceutical giant Novartis in a deal that values the company at $12 billion. Novartis is paying a premium of 42% for Avidity’s stock, hence the bullishness in Dyne that pushed its share price nearly as high.
Image source: Getty Images.
Both Dyne and Avidity are clinical-stage companies busy developing a similar approach to the treatment of muscle disorders. Their therapies utilize antibodies to deliver the therapy to the affected area of the body.
This is a relatively novel and cutting-edge approach in the biotech space, hence the interest of a sprawling pharmaceutical player with capital to spend, such as Novartis.
Today’s Change
(41.18%) $7.05
Current Price
$24.17
Key Data Points
Market Cap
$2B
Day’s Range
$23.00 – $24.95
52wk Range
$6.36 – $35.68
Volume
13M
Avg Vol
2.6M
Gross Margin
0.00%
Dividend Yield
N/A
Buyer beware
The market’s thinking, clearly, is that if Avidity can command a premium, a business taking the same approach like Dyne can also be sold lucratively. I should caution here that this doesn’t make any offer from a deep-pocketed strategic investor a sure thing for Dyne. So for now, investors are best advised to concentrate on the company’s inherent potential rather than a possible buyout.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
