What happened

Shares of Horizon Therapeutics (HZNP) were skyrocketing 27.2% higher as of 10:48 a.m. ET on Wednesday. The big jump came after the company announced Thursday evening that it's in discussions with Amgen (AMGN 1.06%), Johnson & Johnson (JNJ 0.18%) subsidiary Janssen, and Sanofi (SNY 0.35%) about potentially being acquired.

So what

Biotech stocks nearly always soar on news of a potential acquisition. But Horizon's big gain today could be putting the cart before the horse.

There were two words in Horizon's press release that investors should note: "highly preliminary." That's the way the company described its discussions with Amgen, J&J, and Sanofi. Horizon added, "There can be no certainty that any offer will be made for the company."

Because no offer has been made, investors also have no idea what the price tag for a deal might be. However, Horizon could benefit if the three potential suitors get into a bidding war.

It's not surprising that Amgen, J&J, and Sanofi could be interested in Horizon. The company currently markets eight drugs. One of them -- thyroid eye disease therapy Tepezza -- is already a blockbuster. Horizon thinks that chronic gout drug Krystexxa has peak U.S. sales potential of more than $1.5 billion.

Now what

Horizon stated in a press release that each of the three big drugmakers must either announce a takeover offer or announce a decision to not make an offer no later than 5 p.m. ET on Jan. 10, 2023. It's possible that this deadline could be extended, but that could happen only with the consent of the Irish Takeover Panel.