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: Shares of Prosensa (NASDAQ:RNA), a clinical-stage biopharmaceutical company focused on RNA-therapeutics designed to treat genetic disorders, skyrocketed as much as 65% after BioMarin Pharmaceutical (NASDAQ:BMRN) agreed to purchase the company.

So what: Under the terms of the agreement, BioMarin will pay $680 million, or $17.75 per share, in "upfront consideration" for Prosensa, with shareholders potentially earning up to $160 million extra in contingent value if experimental Duchennne muscular dystrophy drug drisapersen is approved in the U.S. by May 15, 2016 ($80 million) and in the EU by Feb. 15, 2017 ($80 million). The deal is being financed entirely by BioMarin's cash on hand.

As BioMarin's CEO Jean-Jacques Bienaime commented, "We will leverage our experience at developing rare disease therapies to achieve regulatory approvals and bring drisapersen to market as quickly as possible." The transaction is expected to close sometime in the first quarter.

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Source: GlaxoSmithKline.

Now what: BioMarin is a smart cookie when it comes to rare disease drugs, but I'd be remiss if I didn't say I was scratching my head on this one. It'd be one thing if drisapersen's future as a DMD therapy looked bright, but it actually failed miserably in a phase 3 clinical study last year after it showed no benefit over the placebo, although a deeper analysis demonstrated it could be effective in early stages of the disease. Furthermore, previous drisapersen partner GlaxoSmithKline walked away from its portion of the deal, leaving Prosensa with all remaining study and development costs moving forward. If Glaxo didn't want drisapersen, what does BioMarin see that it didn't?

In addition, this is shaping up to be a somewhat competitive space in spite of DMD being a rare disease. Sarepta Therapeutics has delivered 144-week data for its experimental drug eteplirsen on its relatively small dozen-patient midstage cohort which continued to show a statistically significant benefit in the six-minute walk test compared to the progression typically observed in non-eteplirsen-dosed patients. Though Sarepta has had its issues getting on the same page with the Food and Drug Administration, it would appear that a new drug application filing could happen in early 2015.

As things stand now I'd be jumping for joy and buying drinks for everyone at the local bar if I were a Prosensa shareholder and possibly banging my head against the wall if I owned BioMarin shares. I could certainly be wrong and drisapersen could prove effective in treating early stage DMD, but the phase 3 results compounded by GlaxoSmithKline walking tells me everything I need to know about Prosensa.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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