Ra Pharma Stock Hits Triple-Digit Gain After Biotech Company Snags $2.1 Billion Takeover Deal

Ra Pharmaceuticals (RARX) stock rocketed more than 100% higher Thursday after Belgium biotech company UCB agreed to acquire it for $2.1 billion.


On the stock market today, Ra Pharma stock soared 101.1%, to 45.64, in massive volume. Shares neared their takeover price of $48 per share in cash.

Ra Pharma is studying a drug called zilucoplan, a potential rival to Alexion Pharmaceuticals‘ (ALXN) Soliris. Zilucoplan is now in a Phase 3 study of patients with generalized myasthenia gravis, a condition in which the immune system attacks the body’s tissues, causing muscle weakness.

UCB Chief Executive Jean-Christophe Tellier called Ra Pharma “an excellent strategic fit.” The company expects to launch six potential products over the next five years. Adding Ra Pharma will strengthen its neurology and immunology assets, he said in a written statement.

“The combination will provide us with the opportunity to become a leader in treating people living with myasthenia gravis, an autoantibody mediated neurological orphan disease with a high unmet need, as well as adding a high productive technology platform to our innovation engine,” he said.

Ra Pharma Stock Rockets On Takeover Deal

Under the terms of the deal, UCB will pay Ra Pharma shareholders $48 per share in cash for a total transaction value of $2.1 billion. The deal represents a 93% premium to the closing price of Ra Pharma stock based on its 30-day volume weighted average.

Both boards of directors have approved the transaction. The biotech companies must secure approval from Ra Pharma shareholders and obtain antitrust clearance. They expect to wrap the deal by the end of the first quarter of 2020.

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UCB expects the deal to be accretive to its core earnings per share beginning in 2024. It will also help accelerate top and bottom lines at that time, the biotech company said in a news release. The deal fits in with UCB’s plan to “accelerate and expand.”

The company used the term “pipeline in a product” in describing Ra Pharma’s zilucoplan. Industry watchers use the same terms to describe Alexion’s Soliris, approved to treat four conditions, including generalized myasthenia gravis.

Ra Pharma also has several earlier-stage efforts in kidney disease, autoimmune disease and diseases of the central nervous system. The biotech company is also partnered with Merck (MRK) on a cardiovascular drug.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.


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