Please ensure Javascript is enabled for purposes of website accessibility

Why Eidos Therapeutics Stock Is Skyrocketing Today

By Keith Speights – Oct 5, 2020 at 12:05PM

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

BridgeBio announced plans to fully acquire the biotech.

What happened

Shares of Eidos Therapeutics (EIDX) were skyrocketing 41.1% higher as of 11:50 a.m. EDT on Monday. The huge gain came after BridgeBio Pharma (BBIO 4.33%) announced plans to acquire Eidos.  

So what

BridgeBio already owns a major stake in Eidos. It's now seeking to buy the remaining 36.3% of Eidos' outstanding shares. The most important thing for Eidos shareholders, of course, is the attractive price tag of the deal. BridgeBio plans to fully acquire Eidos for a 41% premium above the closing price of the biotech stock on Oct. 2, 2020.

Businessmen shaking hands with stock charts going up

Image source: Getty Images.

Eidos shareholders have a choice in the proposed acquisition deal. They can either receive 1.85 shares of BridgeBio stock or $73.26 in cash for every share of Eidos they own.

Neil Kumar, CEO of both BridgeBio and Eidos, said the proposed acquisition transaction "removes the operational complexity of the current ownership structure." He also thinks the deal makes sense right now as preparation is beginning for a potential global launch of Eidos' drug acoramidis, which is being evaluated in a late-stage study for treating rare genetic diseases transthyretin amyloidosis (ATTR) cardiomyopathy and polyneuropathy.

Now what

Eidos Therapeutics' shareholders now must approve the proposed acquisition with at least two-thirds of outstanding shares not already owned by BridgeBio voting in support of the deal. In addition, BridgeBio shareholders must approve the issuance of new shares to fund the transaction. The acquisition is expected to close in the first quarter of 2021. 

Keith Speights 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

Eidos Therapeutics, Inc. Stock Quote
Eidos Therapeutics, Inc.
EIDX
BridgeBio Pharma, Inc. Stock Quote
BridgeBio Pharma, Inc.
BBIO
$10.37 (4.33%) $0.43

*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
331%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

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.