XenoPort, Inc. (NASDAQ: XNPT)
XenoPort is having an incredible day in the market today, and for good reason. The company announced that it will be acquired, and nothing seems to excite investors quite like acquisitions. Today, we’ll talk about the acquisition, how the market is reacting to the news, and what we can expect to see from XNPT moving forward. So, let’s get right to it…
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XNPT Will Be Acquired
Early this morning, it was announced that XenoPort will be acquired by Arbor Pharmaceuticals, LLC. The two companies recently entered into a definitive agreement, which has valued XNPT at $7.03 per share. This brings the total value of the acquisition to $467 million in an all-cash transaction. This is incredible news for investors. After all, the deal gives XNPT a premium of 60% from the closing price seen on May 20th. In a statement, Ed Shutter, President and CEO at Arbor, had the following to offer:
“We are pleased to be adding HORIZANT and the XenoPort pipeline to the growing portfolio of Arbor products… We believe that XenoPort’s lead product HORIZANT offers patients and physicians a valuable treatment option for moderate-to-severe primary restless legs syndrome and postherpetic neuralgia. The XenoPort sales team has done an excellent job of growing HORIZANT, and we look forward to supporting them to continue this significant momentum.”
Following up on that statement, Vincent J. Angotti, CEO at XNPT, had the following to offer:
“This transaction provides immediate and substantial value to our stockholders, and we believe that Arbor is well positioned to provide the proper resources for a more expanded commercialization effort of HORIZANT. We evaluated many potential options to maximize the value for stockholders and believe this transaction represents a great outcome for XenoPort stockholders.”
How The Market Reacted To The News
As investors, one of the first things we learn is that the news moves the market. Any time there is positive news released with regard to a publicly-traded company, we can expect to see gains in the value of the stock associated with that company as a result. Adversely, negative news will generally lead to declines. In this particular case, the news that was released was overwhelmingly positive. After all, the deal represents an incredible premium that has excited shareholders. As a result, we’re seeing strong gains in the value of the stock today. Currently (10:17), XNPT is trading at $6.90 per share after a gain of $2.50 per share, or 56.82%, thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from XNPT. When it comes to products, the company has done incredibly well with HORIZANT. However, they haven’t had the money required to really expand commercialization. Nonetheless, now that the company is being acquired by Arbor Pharmaceuticals, commercialization is likely to ramp up to full speed, and do it quickly. This will likely lead to strong sales, sending XenoPort even further up in the market. All in all, I’m expecting to see strong gains moving forward.
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What Do You Think?
Where do you think XNPT is headed moving forward? Join the discussion at the CNA Finance Forum!
[Image Courtesy of Blue Diamond Gallery]