Cardiome Pharma Corp (NASDAQ: CRME) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced the sale of assets that led to excitement among investors, sending the stock screaming for the top. Today, we’ll talk about the sale of assets, what we’re seeing from the stock, and what we’ll be watching for with regard to CRME ahead.
CRME Announces The Sale Of Assets
As mentioned above, Cardiome Pharma is having an overwhelmingly strong start to the trading session this morning after announcing asset sale news. In a press release issued early this morning, the company announced that it has entered into a definitive arrangement agreement with Cipher Pharmaceuticals Inc. Under the terms of the agreement, Cipher will acquire the entire Canadian business portfolio at CRME. According to the release, the acquisition will happen with an upfront payment of $25.5 million.
Also, CRME shareholders will receive shares at a one-for-one ratio, of a newly created entity named Correvio Pharma Corp. This entity will acquire and hold all of Cardiome’s pre-transaction assets, excluding the Canadian business portfolio associated with the Cipher acquisition. In a statement, William Hunter, MD, CEO at CRME, had the following to offer:
Cipher is a leading specialty pharma company with a highly-experienced commercial team in the Canadian marketplace… This transaction enables us to focus our internal resources on our rapidly growing European business and rest of world commercial initiatives, along with providing important financial flexibility for the execution of potential future business development transactions. It also allows us to secure important non-dilutive capital, while reducing our cash burn. We believe this new strategic path creates a more robust company and leaves us well positioned for long-term growth.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. After all, under this agreement, CRME will bring in a good amount of non-dilutive capital and bring core focus to its non-Canadian assets. So, it’s no surprise to see that the stock is headed up in the market today. At the moment (9:26), CRME is trading at $2.35 per share after a gain of $0.78 per share or 49.68% 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 CRME. In particular, we’re interested in following the changes the company makes following the asset sale, including how it uses the funding provided to focus on the core remaining products. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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