Zogenix, Inc. (NASDAQ: ZGNX) stock soared 65.6% premarket after revealing that Belgian company UCB SA had agreed to buy it for $1.9 billion to expand its drug portfolio of epilepsy treatments.
UCB has agreed to pay $26 for each outstanding Zogenix share, representing a 66% premium to Zogenix’s closing stock price on Tuesdays.
Investors cheered the move, as evidenced by the over 60% surge in Zogenix stock to reach the price offered by UCB.
Zogenix shareholders also stand to receive an extra $2 dividend payment if the Fintepla drug is approved as a treatment for Lennox-Gastaut syndrome before December 31, 2023.
The move to acquire Zogenix could provide a significant boost to UCB, given that ZGNX is an industry leader when it comes to epilepsy treatments.
For example, Fintepla is already an approved treatment for Dravet syndrome, a rare disease that causes seizures. In addition, the drug has so far received approval from US and European health regulators to treat Dravet syndrome, a rare form of epilepsy.
Lennox-Gastaut syndrome is categorized as an orphan disease due to the lack of tailored treatments, which is why Fintepla’s approval is crucial and why UCB is willing to pay Zogenix shareholders a special dividend once approved.
UCB plans to fund the acquisition using its cash reserves and a term loan. UCB expects Zogenix to expand its revenues immediately after the acquisition is completed and to become earnings accretive by 2023.
Today’s announcement was welcomed by investors, evidenced by the rally in Zogenix shares, which will be delisted once the deal closes.
*This is not investment advice. Always do your due diligence before making investment decisions.
Zogenix stock price.
Zogenix stock price surged 65.6% premarket to trade at $25.90, rising from Tuesday’s closing price of $15.64.
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