Pernix Therapeutics (PTX) Stock: Climbing Dramatically On Acquisition Rumor


Pernix Therapeutics Holdings Inc (NASDAQ: PTX)

Pernix Therapeutics Holdings is having an incredibly strong trading session today. Currently the stock is up by more than 20% after Intereconomia announced that PTX has been acquired by Concordia International. The acquisition has not yet been confirmed. However, CNA Finance is currently investigating the story. We will be updating as we investigate.

Update 1:55 – I called Pernix and left a voicemail asking if they can confirm an acquisition. I will keep you posted on any response I receive. I will also be sending an email immediately.

There Is A Very High Likelihood Of An Acquisition

I have not yet received a response from PTX. So, I cannot confirm or debunk the rumors that Concordia International Corp (NASDAQ: CXRX) has acquired, or has plans to acquire, the company. However, in the past, I did predict an acquisition was coming, and I still do believe that there’s a very high likelihood of a PTX acquisition down the line.

One Look At The CEO Tells You That There May Be An Acquisition

When it comes to Pernix Therapeutics, the CEO of the company, John Sedor, screams acquisition. One of the more recent moves we’ve seen from the company is the fact that John Sedor took over as the permanent CEO, stepping up from his interim position.

This, to me, is very interesting. If you’ve been following biotech for some time, chances are that you know the Sedor name. Not only is John Sedor a well respected expert in the pharmaceuticals industry, he is known for his skills when it comes to mergers and acquisitions. It is not uncommon for Sedor to take a CEO position, restructure the company to make sure that they are primed for an acquisition, and strike on making a deal. In fact, he did that in February of 2014 with Cangene Corporation.

Sedor Started The Restructuring Process From Day One!

As soon as Sedor took over as the permanent CEO of the company, he said that he would be restructuring the company. In fact, he announced that he would be combining two sales departments in order to get rid of redundancies in the process. On top of that, it was later announced that three senior members of PTX had left the company. At this point, the company has completely revamped the sales process, management, and, seemingly, every aspect of the business.

Is There A Good Reason That Any Company Would Want To Acquire PTX?

In my opinion, Pernix Therapeutics is in a prime position for an acquisition. At the moment, the stock is trading at an incredibly low price. In fact, at under $1, there’s tons of upside potential, with analysts expecting it to get higher than $6. So, if an acquisition were to happen right now, the buyer would be getting a good deal.

Also, the assets at PTX are likely in high demand among other companies in the industry. With several products in the pain management and neurology areas, the company offers quite a bit of value. Also, following a recent study looking at Silinor 6, there’s even more value now than there was just months ago. So, I do believe that there is demand out there for the purchase of PTX.

Now, it’s time to dig into the reporter of the original story to see if there is any validity there. I’ll be back with more news soon!

Update 2:32 

Looking Into The Claim

As mentioned above, the claim that Pernix Therapeutics was being acquired was originally made at Intereconomia. Personally, I do not believe that this is a true report. There was one big issue that I’ve found with the report…

A Big Issue With A Claim Of Process – Intereconomia said the following in their report (keep in mind it is translated to English):

The Canadian group Concordia International Corp emerges as winner in the bid for Pernix Therapeutics Holdings, in a purchase process opened by the pharmaceutical own several months ago….”

I do remember PTX saying that it would consider all options to improve the company. I know that acquisition was an option even months ago. However, there was no open bid process announced. If an open bid process for the sale of Pernix Therapeutics was started months ago, wouldn’t the company have announced it? Wouldn’t they want as many potential buyers seeing the opportunity as possible? To me, the above statement doesn’t make much sense. 

Update 2:36 – I called Parella Weinberg Partners, the firm said to have acted as advisors in this matter, to see if they could verify the claims. The person I spoke to could not confirm or deny the claims. However, she did take my information and said that the firm would call me back. Once again, I will keep you updated.

Update 8/20 3:36 – At this point, it has been a full 25 hours since I contacted Parella Weinberg Partners, and at least a full 24 hours since I contacted Pernix Therapeutics and Concordia. Unfortunately, I have not received a response from either. At this point, I think it’s pretty fair to call this a rumor. There seems to be no validity to the claims, no verifiable data offered, and nothing to really sink your teeth into. Now, it is possible that an acquisition will happen down the road, but at the moment, this particular acquisition doesn’t seem realistic.

What Do You Think?

Do you think the news of the PTX acquisition is real? Join the discussion in the comments below!

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