What happened
Shares of Urovant Sciences (UROV +0.00%) were skyrocketing 93.8% higher as of 11:40 a.m. EST on Friday. The huge gain came after the company announced that it has entered into a definitive agreement to be acquired by Sumitovant Biopharma for $584 million.
So what
Sumitovant Biopharma was already Urovant's largest shareholder, owning around 72% of the company. Urovant CEO James Robinson said his company has "been partnering closely with [Sumitovant] on plans to efficiently launch vibegron and achieve scale as quickly as possible." Vibegron is Urovant's lead pipeline candidate that's in late-stage testing for potentially treating overactive bladder.
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The transaction price represents a 96% premium over Urovant's closing share price on Thursday. It's also a 92% premium over the 30-day volume-weighted average price for the biotech stock.
Pierre Legault, the lead independent member of Urovant Sciences' board of directors, said "Sumitovant's offer represents exceptional value for shareholders." Robinson added, "We believe that this investment represents a vote of confidence in Urovant's future success and will put us in an even stronger position to bring vibegron to market as a new treatment option for patients with overactive bladder and to continue advancing our promising development pipeline."
Now what
Urovant's shareholders must first approve the acquisition. The deal is expected to close in the first quarter of 2021. Urovant hopes to win U.S. regulatory approval for vibegron even sooner. The FDA is scheduled to make its decision on approval for the drug by Dec. 26, 2020.
