Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: King Pharmaceuticals (NYSE: KG) shares are up nearly 40% today after it was announced the company would be purchased by Pfizer Inc. (NYSE: PFE).
So what: Pfizer will pay $3.6 billion in cash for King, the maker of the Flector Patch and Embeda. The $14.25 price per share represents a 40% premium from Monday's price.
Now what: Pfizer has been looking for new products to soften the loss of exclusivity for Lipitor. With King, Pfizer also gets development partnerships with Pain Therapeutics (Nasdaq: PTIE) and Acura Pharmaceuticals (Nasdaq: ACUR). This is a great selling opportunity for King Pharmaceuticals shareholders who have seen their shares nearly double since early July.
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Fool contributor Travis Hoium does not have a position in any company mentioned. Pfizer is a Motley Fool Inside Value pick. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool has a disclosure policy.
