One of the biggest movers in today’s market is BioDelivery Sciences (NASDAQ:BDSI). At the time of writing, BDSI stock has surged more than 50% higher on incredible volume. This move comes, as many would expect, from a big announcement today.
Earlier today, it was announced that opioid maker Collegium Pharmaceuticals (NASDAQ:COLL) would be acquiring BioDelivery in a $4 million deal. While this deal is small in nature, it does reflect some serious undervaluation with BDSI stock. Even after today’s 50% rise, this company still trades at a valuation of around $550 million.
So, why is Collegium making this move? Well, BioDelivery has some rather intriguing drugs in its portfolio. Among the key drugs Collegium is likely interested in is Belbuca, an opioid drug that fits the company’s portfolio well. This drug is BioDelivery’s core cash cow, bringing in nearly $150 million in sales in 2021. Additionally, estimates are that this opioid drug accounted for nearly “5% of the overall long-acting opiod market as a whole.”
For those interested in what this deal entails, here are some details to consider.
BDSI Stock Soars on Takeover Announcement
Today’s announced deal between BioDelivery and Collegium certainly makes sense from a strategic perspective. For investors in BDSI stock, the structure of this deal appears to be attractive. Accordingly, it appears there’s no concerns about this deal failing to gain shareholder approval.
That’s because this buyout deal, priced at $5.60 per share, has been almost fully priced in. At the time of writing, shares of BDSI stock trade at $5.56 per share, factoring in a nearly 100% chance of this deal going through. This $4 million transaction will take the form of an all-cash transaction and represents a 65% premium to the company’s average price over the past 30 days. For BioDelivery investors, that’s a good deal.
The ultimate completion date has not been set. However, the companies are reportedly targeting Q1 2022 as a closing window. That’s a relatively quick turnaround, a factor that is also likely driving BDSI stock toward its buyout price so quickly today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.