What's Happening: Shares of the orphan drug specialist BioMarin Pharmaceuticals (NASDAQ:BMRN) rose by over 12% today on heavy volume after a rumor broke that the company could be the next big takeover target. While there are no credible sources backing this rumor, the impression on the Street is that Shire (NASDAQ:SHPG) might be interested, given that the acquisition would match the Irish biopharma's desire to become a leader in the orphan drug space.
Adding some fuel to the stock's rapid rise today, analysts at both Deutsche Bank and UBS also upped their price targets for BioMarin to $140 and $136 per share, respectively.
Why It's Happening: BioMarin has been the subject of buyout rumors on an annual -- and sometimes monthly -- basis over the last couple of years, with similar unfounded whispers linking the biopharma to Roche last year. What's important to keep in mind is that these rumors have repeatedly turned out to be false -- causing shares to fall after the speculation subsides. So even though today's upgrades are certainly good news for longer-term oriented investors, you may want to shy away from buying this stock on the back of yet another buyout rumor.
George Budwell has no position in any stocks mentioned. The Motley Fool recommends BioMarin Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.