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