Shares of the drug delivery specialist Antares Pharma (ATRS) jumped by as much as 49.2% in premarket action Wednesday morning. The company's stock is bolting higher in response to a $960 million definitive merger agreement with Halozyme (HALO 1.43%).
Per the terms of the deal, Halozyme will pay $5.60 per share in cash to acquire Antares, which amounts to a 49.7% premium compared to the drug delivery company's closing price Tuesday afternoon. The two biopharmaceutical companies reportedly expect the deal to close before the end of the second quarter of 2022. Halozyme's shares are flat in premarket trading at the time of this writing in response to this news.
Halozyme expects this transaction to significantly boost its top- and bottom-line growth all the way out to 2027. Equally as important, this deal ought to also bolster the company's free cash flow generation over this period. Halozyme, in turn, should have plenty of dry powder for additional business development deals in the coming years to accelerate its growth and value proposition to investors. From a big-picture perspective, Halozyme will now sport a top drug delivery product portfolio via its own Enhanze drug delivery system, and its newly acquired auto-injector platform from Antares.
Is Halozyme making the right move by acquiring Antares? Antares was arguably woefully undervalued prior to this buyout. The company's shares were trading at well under three times 2023 projected sales, after all.
What's more, there is a clear synergy between the companies. Thus, Halozyme seems to be creating immediate value for its shareholders through this transaction and setting itself up for healthy levels of growth over the next five years. So, overall, this acquisition does indeed appear to be a worthwhile move for Halozyme.