What happened
Shares of Amryt Pharma (AMYT) were up 109.4% for the week, as of Thursday afternoon, according to S&P Global Market Intelligence. Shares of the Irish commercial-stage biopharmaceutical company, which specializes in rare and orphan diseases, closed last Friday at $7 a share, then rose to a 52-week high as $14.77 on Wednesday and were as high as $14.66 late Thursday. The stock is up more than 100% over the past 12 months.
So what
On Sunday, Amryt Pharma's board announced it would accept a takeover bid worth as much as $1.48 billion by Italian pharmaceutical and healthcare company Chiesi Farmaceutici. The all-cash deal valued Amryt's shares at $14.50. The deal is expected to close in the first half of the year.
Amryt's drug, Oleogel-S10 (filsuvez), an herbal gel with dry bark extract, was approved by regulators in Europe last year to treat epidermolysis bullosa, a rare inherited skin disease known as "butterfly skin" because of how fragile the skin is.
Amryt's marketed therapies also include Myalept (metreleptin), used for patients with congenital or acquired generalized lipodystrophy, a rare disorder that affects the body's fat stores. Myalept was Amryt's top seller in the third quarter, responsible for $37.9 million of the company's overall $61.1 million in revenue in the quarter.
Now what
The move makes sense for Chiesi because it broadens that company's rare disease portfolio. Amryt is financially healthy, so its products should fairly quickly be accretive for Chiesi. In the third quarter, Amryt issued annual guidance of between $260 million and $270 million in revenue, up 17% to 21% over 2021. Through nine months, the company also improved its bottom line, with an earnings-per-share (EPS) loss of $0.13, compared to an EPS loss of $0.20 in the same period a year ago.
With both boards approving the sale, it's unlikely the deal will falter. For that same reason, it's unlikely Chiesi's bid improves, so buying the stock above $14.50 doesn't make much sense for investors.