Please ensure Javascript is enabled for purposes of website accessibility

Why Five Prime Therapeutics Stock Is Skyrocketing Today

By Keith Speights - Updated Mar 4, 2021 at 11:47AM

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

Amgen is paying a premium to buy the small biotech.

What happened

Shares of Five Prime Therapeutics (FPRX) were skyrocketing 78% higher as of 11:22 a.m. EST on Thursday. The huge jump came after Amgen (AMGN -0.54%) announced plans to acquire Five Prime for close to $1.9 billion. 

So what

Some investors might have sensed that something good was on the way for Five Prime Therapeutics in recent weeks. The biotech stock fell more than 8% year to date a couple of weeks ago. Between then and market close on Wednesday, though, shares had jumped around 20% with no obvious news to fuel the gain.

Woman drawing a picture on a wall of a big fish about to swallow a small fish.

Image source: Getty Images.

Regardless, today's announcement is certainly great news for Five Prime Therapeutics shareholders. Investors appear to also think it's a good move for Amgen. 

The big biotech will pick up Five Prime's crown jewel, bemarituzumab, with the acquisition. Bemarituzumab is an antibody therapy targeting gastric cancer and other types of solid tumors. Five Prime reported positive phase 2 results for the experimental drug in November 2020.

Now what

Amgen and Five Prime Therapeutics expect the transaction will close by the end of the second quarter of 2021. In the meantime, Five Prime will probably continue its discussions with regulatory agencies about advancing bemarituzumab into a pivotal late-stage clinical study.

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

Five Prime Therapeutics, Inc. Stock Quote
Five Prime Therapeutics, Inc.
FPRX
Amgen Inc. Stock Quote
Amgen Inc.
AMGN
$243.40 (-0.54%) $-1.32

*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 service.

Stock Advisor Returns
345%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

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.