- Rumors surrounding an acquisition from Samsung sent Biogen stock soaring 9.5% on Wednesday
- With the rumours denounced as ‘false’, stock tanked around 8% in early Thursday trading.
In a surprise turn in the market, Biogen’s (NASDAQ: BIIB) Wednesday stock surge was as short-lived as the rumors that sparked it. The US pharmaceutical company, specializing in drugs for neurological diseases, witnessed an influx of buyers yesterday as rumors surfaced regarding a possible acquisition from South Korean firm Samsung BioLogics.
Biogen stock closed at gains of around 9.5% yesterday before gains were completely erased with the open of Thursday’s market; following confirmation that the rumors were in fact false.
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The report came from Korea Economic Daily, which cited investment banking sources for the misleading information that caused the bullish market reaction. It was said that Biogen has approached Samsung to buy its shares – valued at more than $42B. However, following a regulatory filing, the plans for the deal were confirmed as ‘not true’.
It isn’t surprising that market participants reacted in the manner that they did; the deal would be the largest overseas acquisition ever from a South Korean company. Furthermore, Samsung has large plans for expansion in the coming years; aiming to invest around $206B in biopharma, AI, robotics, and more.
The acquisition would have provided some relinquishment from the company’s recent struggle with their Alzheimer’s drug Adulhelm. Whilst causing a stock surge of almost 40% in June, the price quickly retraced when sales slowed as hospitals complained that the high cost wasn’t worth the benefits.
Biogen has been stuck in a steep downtrend for the last 6 months, but with many more drugs in the pipeline, investors might want to watch out for another stock surge resemblant of June’s price action.