Dyax Corp. (DYAX) Climbs On Acquisition Announcement

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Dyax Corp. (NASDAQ: DYAX) | Shire PLC (ADR) (NASDAQ: SHPG)

If you’re a Dyax investor, today is a great day for you. That’s because the stock is up in a massive way after Shire announced that it had struck a deal to acquire the company. Today, we’ll talk about the details of the acquisition, what we’re seeing in the market as a result, and Shire’s future acquisition plans. So, let’s get right to it…

Shire Will Acquire Dyax In An All Cash Deal

Shire, a London based pharmaceutical company, announced today that it has struck an agreement to acquire Dyax. Under the agreement, Shire will pay up to $6.5 billion for the acquisition. It will start with an up front payment of $37.30 per share which equates to about $5.9 billion. However, that’s not where it ends. SHPG also agreed to pay DYAX up to an additional $4 per share upon the approval of an experimental drug designed for the treatment of herditary angioedema, a rare and possibly life-threatening condition. The additional $4 per share would push the deal up $646 million, giving it a total of about $6.5 billion. This offers DYAX a premium of more than 35%. Upon the announcement of the deal, Shire’s CEO had the following to say with regard to experimental drugs that will be acquired:

DX-2930 is a strategic fit with our HAE domain expertise, and we are well-positioned to advance the development, registration and commercialization of DX-2930 for the benefit of HAE patients…”

How The Market Reacted To The News

As we’ve come to expect any time an acquisition is announced, the company being purchased is having a great time in the market today. Currently (10:13), DYAX is trading at $36.29 per share after a gain of 31.82%. On the other hand, SHPG started low before making its way to the green. At the moment, the stock is trading at $227.09 per share after a small gain of 0.02% so far on the session.

Shire Is Planning Further Acquisitions

When it comes to SHPG, the acquisition of DYAX isn’t the only one in the plans for the stock. In fact, the company is working on an acquisition that would absolutely blow the acquisition of DYAX out of the water. That’s right, I’m talking about SHPG’s plans to acquire a rare disease competitor known as Baxalta Inc (NYSE: BXLT). If this acquisition goes through, SHPG will find themselves shelling out about $30 billion for the purchase. However, this is still a long way off with plenty of red tape to cut through before we get to the finish line.  I’ll keep you updated on the event as the story unfolds.

Shire Is A Strong Investment Moving Forward

Over the years, SHPG has proven that it is a strong company. According to Street Insider, the company has reported stronger than expected earnings in 5 out of the last 8 quarters, with the most recent quarter being an incredibly positive earnings surprise. Not only does SHPG have a strong product offering, they also have an incredible pipeline – one that is becoming even bigger, thanks to the acquisition deal with DYAX. While Shire is already an incredible company, the company only stands to grow further as it continues to acquire mid-sized biotech companies. All in all, this is one for investors to keep a close eye on!

What Do You Think?

What do you think of the DYAX acquisition and what is your opinion with regard to SHPG as a long term investment? Let us know in the comments below!

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