Why XenoPort Inc. Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of XenoPort (NASDAQ: XNPT  ) , a biopharmaceutical company focused on developing therapies to neurological disorders, gained as much as 18% following a press release that it mailed a proxy letter to shareholders urging them to vote for its three nominated board members in an upcoming board election.

So what: According to the press release from XenoPort, Clinton Relational Opportunity Master Fund, beneficial owner of 1.8% of XenoPort's common stock, has nominated three of its own members to be placed on XenoPort's board of directors. In response, XenoPort mailed letters to its stockholders urging them to vote in XenoPort's three suggested candidates. The highlights of the letter including the ongoing commercialization of restless-leg syndrome therapy Horizant, the development of XP23829, a fumaric acid ester candidate being studied as a therapy for relapse-remitting multiple sclerosis and psoriasis, and the notion that Clinton's board nominees may undermine the current board's goal of enhancing shareholder value.

Now what: You still might be scratching your head a bit and wondering why XenoPort is moving higher. The simple answer is that shareholders are going to be winners after this board election regardless of which side is the victor. Clinton is obviously intent on boosting the underlying value of its equity position, which would align nicely with shareholders. On the flipside, if XenoPort's nominees win it keeps intact the company's plan to expand Horizant's commercialization and focus on XP23829's development. Given that revenue should more than double this year and nearly double again in fiscal 2015, the company is obviously doing something right. As an investor I'd certainly like to see XenoPort's losses narrow a bit before I considered the company a viable investment opportunity, but at this point I'd have no trouble suggesting the company be added as watchlist candidate.

XenoPort shares may be popping today, but it'll likely have a hard time keeping pace with this top stock in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2924485, ~/Articles/ArticleHandler.aspx, 9/2/2015 6:09:22 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated Moments ago Sponsored by:
DOW 16,351.38 293.03 1.82%
S&P 500 1,948.86 35.01 1.83%
NASD 4,749.98 113.87 2.46%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/2/2015 4:00 PM
XNPT $7.31 Up +0.41 +5.94%
XenoPort, Inc. CAPS Rating: ****