Pernix Therapeutics Holdings Inc (NASDAQ: PTX) is having an overwhelmingly strong start to the trading session this morning after the company announced news surrounding a special purpose vehicle (SPV) created by Pernix and an investor group. The SPV, known as Nalpropion Pharmaceuticals announced that it will be acquiring key assets. Of course, the news excited investors, sending the stock on a run for the top. Today, we’ll talk about:
- The news;
- what we’re seeing from PTX as a result; and
- what we’ll be watching for ahead.
PTX Gains On Nalpropion News
As mentioned above, Pernix Therapuetics Holdings is having a strong day int he market today after announcing news surrounding an SPV it created with investors known as Nalpropion Pharmaceuticals. In a press release issued early this morning, it was announced that Nalpropion Pharmaceuticals has been informed by Orexigen Therapeutics that no other bids surrounding the company’s assets were received. Therefore, Nalpropion anticipates being declared as the highest bidder for the company’s assets and expects the transaction to close on July 13, 2018.
In particular, the agreement surrounds the acquisition of certain assets of Orexigen, including Contrave®. Contrave® is a prescription-only weight loss medication. In the release, PTX said that its SPV will be acquiring the assets for a total cost of $75 million in cash. Also, upon the closing of the transaction, PTX will receive a management fee equal to 5% of net sales derived by the SPV and reimbursement of certain shared expenses at cost. These payments will be made in exchange for the company assuming responsibility for product distribution in the United States as well as managing the SPV for an initial term of two years. In a statement, John Sedor, Chairman and CEO at PTX, had the following to offer:
We are excited about the opportunity for Pernix to continue the positive growth trend for this market leading product… We believe this transaction has the potential to create significant shareholder value, as Pernix will recognize immediate benefits in the form of a management fee and shared services reimbursement, while also having the opportunity to acquire the rights to Contrave over time.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to invest is that the news moves the market. In the case of Pernix Therapeutics, the news released today proved to be overwhelmingly positive. After all, with Contrave® now in the grips of the company, revenue growth is likely on the horizons. So, it’s no surprise to see that excited investors are sending the stock toward the top today. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (8:51), PTX is trading at $2.75 per share after a gain of $0.32 per share or 13.17% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on PTX. In particular, we’re interested in following the story surrounding the acquisition of Contrave® and other Orexigen assets. Nonetheless, we’ll continue to keep a close eye on the news and bring it to you as it breaks!
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