Please ensure Javascript is enabled for purposes of website accessibility

Why Portola Pharmaceuticals Is Skyrocketing Today

By Prosper Junior Bakiny – May 5, 2020 at 11:42AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Alexion Pharmaceuticals made a move to acquire Portola Pharmaceuticals.

What happened?

Shares of Portola Pharmaceuticals (PTLA) -- a biopharmaceutical company that focuses on the development of treatments for life-threatening blood disorders -- are up by a whopping 129% as of 12:11 p.m. EDT on Tuesday. The company's shares more than doubled following the news that Portola reached an agreement to be acquired by Alexion Pharmaceuticals (ALXN).

So what

Alexion will launch a tender offer to acquire all the outstanding shares of Portola for $18 per share in cash. Note that Portola closed at about $7.76 per share yesterday, which means the proposed price of this acquisition represents a significant premium over Portola's stock price, at least as of the closing of the market on Monday. This factor explains why investors loaded up on Portola's shares and drove its stock price significantly higher today. After an active morning trading session, Portola's shares are now worth approximately $17.80 apiece.

Five arrows pointing up.

Image Source: Getty Images.

Now what

Alexion is looking to strengthen and diversify its product lineup with this deal. "The acquisition will add near-term diversification to Alexion's commercial portfolio and provides the opportunity to apply the company's demonstrated global commercial excellence to create long-term value for patients and shareholders," management said.

In particular, Alexion will add Andexxa to its lineup, which is a product that reverses the side effects of anticoagulant medications, including uncontrolled bleeding. During the fiscal year 2019, Andexxa generated $111.5 million in net product revenue. Alexion believes Andexxa still has significant untapped potential, and the biotech company will look to expand the number of patients who benefit from this drug "while also driving value for shareholders."

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alexion Pharmaceuticals, Inc. Stock Quote
Alexion Pharmaceuticals, Inc.
ALXN
Portola Pharmaceuticals, Inc. Stock Quote
Portola Pharmaceuticals, Inc.
PTLA

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.