Crinetics Pharmaceuticals shares nearly doubled on Monday, July 6 after Vertex Pharmaceuticals agreed to buy the company for $10 billion in cash.
Vertex will pay $85 a share. That is roughly double Crinetics’ closing price the day before Vertex announced the deal.
What Vertex Is Actually Buying
Crinetics makes Palsonify, a pill for acromegaly, a rare disorder that causes excess growth hormone. Patients previously relied on regular injections, so a once-daily pill is a real upgrade in convenience.
Vertex, known for its cystic fibrosis drugs, is betting big on that convenience. It has a second drug in late-stage trials for another rare hormone condition. Together, the two products could bring in more than $5 billion a year at their peak.
William Blair analyst Myles Minter said the price tag makes sense if that sales target holds up.
“Investors will debate this (stock was down 1.8% after hours), but we view this as reasonable if the peak sales number can be achieved.”
Retail sentiment on Crinetics flipped from bearish to bullish within a day. The GameStop eBay takeover saga shows how fast retail mood can swing on buyout news.
Is There Any Upside Left?
Once a company announces a cash buyout, its stock stops trading on its own business prospects. It trades toward the agreed price instead.
Crinetics is already close to that $85 target. The Riot Platforms Bitfarms takeover played out the same way, with shares settling near the offer price.
Most of the reward has already landed. What remains is a small gap, plus the risk that the deal falls through before it closes in the third quarter.
Bitrue