Tercica shares skyrocket after Ipsen buyout news

Shares of Tercica Inc. nearly doubled in value Thursday afternoon after the biopharmaceutical company said it will be bought by Ipsen SA in a cash deal valuing the company at $9 per share, or $663 million. The news led analysts to boost price targets on the stock.

The deal value was more than twice Tercica's $4.41 closing price Wednesday. On Thursday, shares surged $4.39 to $8.80 after touching $8.90, its highest point since December 2005, earlier in the session.

Robert W. Baird & Co. analyst Christopher Raymond raised his price target to $9 from $6, matching the per-share price France's Ipsen is paying for the Brisbane, Calif., company. He kept a "Neutral" rating.

Raymond said he was surprised by the purchase price, and said the deal is "yet another example of an international company acquiring a U.S. biotech."

Speculation about the next big takeover will likely help other members of the sector, he said.

Friedman, Billings, Ramsey & Co. analyst Jim Reddoch also boosted his target to $9 from $6, and predicted the deal will ultimately go through, since Tercica's board has approved it and Ipsen will soon control 43 percent of outstanding shares.

He maintained a "Market Perform" rating.

Lazard Cpaital Markets analyst Matthew Osborne noted the deal values Tercica at its March 2004 IPO price. He said Tercica's growing presence in the U.S. was likely too attractive for Ipsen to ignore at these levels.