What happened

Immunomedics (NASDAQ:IMMU) ended the day up 19.5% after a judge ruled that the biotech can't close its deal with Seattle Genetics (NASDAQ:SGEN) quite yet.

So what

The stock price going up after the deal was temporarily blocked may seem counterintuitive considering the deal for IMMU-132 was pretty solid, with Immunomedics getting $250 million upfront plus other milestone payments that could make the deal worth about $2 billion. And Seattle Genetics is also on the hook for royalty payments if the drug is eventually approved.

But investors are clearly betting that the judge pausing the deal for 30 days will ultimately result in a better deal -- or perhaps a full sale of the company at a higher price. venBio Select Advisor, which brought the lawsuit to stop the deal, claiming that it was a bad deal for shareholders, is moving to take over the board.

Earlier this month, the activist investor announced that its four nominees had enough votes to be elected to the board. Immunomedics countered with claims that venBio had "interfered with the voting franchise of Immunomedics' stockholders and has irreparably tainted the potential outcome of the company's 2016 Annual Meeting of Stockholders."

Two businessmen arm wrestling

Image source: Getty Images.

Now what

Investors should be careful jumping into this board-fight soap opera. It seems like a bit of a gamble to bet on venBio being able to find another company willing to pay more to license IMMU-132 or an outright purchase of the company. If Seattle Genetics got such a good deal, you'd expect its share price to fall on the news, but the biotech ended the day down just 0.5%.

Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Seattle Genetics. The Motley Fool has a disclosure policy.