Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Biotie Therapies Corp.'s Stock Skyrocketed Today

By George Budwell - Jan 19, 2016 at 10:12AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Acorda Therapeutics and Biotie agree to tie the knot in an all-cash deal worth $363 million.

Image source: Flickr via user e-Magine Art.

What: Shares of Biotie Therapies Corp. (NASDAQ: BITI), a Finnish drugmaker focusing on neurodegenerative and psychiatric disorders, gained more than 86% in early morning trading today on moderately high volume. The catalyst behind this eye-popping move is the news that Biotie has agreed to an all-cash buyout offer, worth $363 million or $25.60 per ADS, from the U.S. biotech Acorda Therapeutics (ACOR 0.43%)

So what: Acorda is reportedly buying Biotie mainly for its experimental Parkinson's disease drug tozadenant, indicated as a treatment to reduce daily "off time," or the amount of time patients taking levodopa experience re-emerging symptoms as a result of the drug wearing off. 

Now what: According to the two companies, tozadenant is currently in late-stage development, putting it on track to potentially reach the market by 2019. Given this long lead time, however, this buyout probably won't make much of an impact on Acorda's near-term outlook. That's disappointing news for investors that were hoping the biotech would make a significant move to broaden its product portfolio in a meaningful way to kick off the new year.

After all, Acorda's flagship multiple sclerosis drug, Ampyra, appears to be plateauing at this stage in its commercialization, and the company's shares are anything but cheap with a staggering 12-month-trailing P/E ratio of 750. That's why I'm content to watch this particular biotech from the safety of the sidelines for now. 

George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Acorda Therapeutics, Inc. Stock Quote
Acorda Therapeutics, Inc.
$0.45 (0.43%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.