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Why Forty Seven Stock Soared 57% in February

By Demitri Kalogeropoulos - Mar 4, 2020 at 7:58AM

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The cancer treatment specialist found a buyer for its business.

What happened

Forty Seven (FTSV) shareholders outperformed a historically weak market by a wide margin last month as the stock gained 57% compared to an 8% decline in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally contributed to a gain of more than 100% in the biotech specialist's shares so far in 2020.

A female scientist performs clinical research.

Image source: Getty Images.

So what

Investors bid up shares of the cancer drug specialist after rumors surfaced about a potential buyout offer coming from healthcare giant Gilead Sciences (GILD -0.63%). The rumors were confirmed in early March when Gilead announced it will purchase Forty Seven for just over $95 per share in cash, equating to a $4.9 billion value.

Now what

The transaction has been approved by the respective company boards, but still has to meet the usual regulatory approvals and closing conditions. Yet the acquisition appears almost certain to go through, and is anticipated to close over the next few months.

If they simply hold their stock until then, Forty Seven shareholders will see the shares converted to cash at the $95.50 per share rate. From there, Gilead is hoping that its bulked-up oncology pipeline will help spur faster growth in the decades to come.

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Forty Seven, Inc. Stock Quote
Forty Seven, Inc.
Gilead Sciences, Inc. Stock Quote
Gilead Sciences, Inc.
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