Chinook Therapeutics (NASDAQ:KDNY) stock is rocketing higher on Monday after the company announced it’s being acquired by Novartis AG (NYSE:NVS).
Novartis AG is acquiring Chinook Therapeutics in a $3.2 billion deal. This has it agreeing to pay $40 per share in cash for KDNY stock. That represents a 67% premium over the stock’s closing price on Friday.
In addition to this, shareholders of KDNY stock will also receive contingent value rights of $4 per share. That’s payable upon certain future regulatory milestones being met for lead product candidate atrasentan. These contingent value rights bring the total value of the deal to $3.5 billion.
Eric Dobmeier, president and CEO of Chinook Therapeutics, said the following about the deal in a news release:
“We believe this transaction is great news for kidney disease patients and the programs we have built at Chinook. Through this merger, Novartis can apply its substantial resources to pursue broader development efforts and commercialization of atrasentan, zigakibart (BION-1301) and other programs in our pipeline to build its global renal therapeutic area.”
Details of the KDNY Stock Deal
Chinook Therapeutics and Novartis AG are awaiting approval from shareholders and regulators before the deal can close. If all goes well on those fronts, the acquisition should close in the second half of the year.
Today’s news also brings with it heavy trading of KDNY stock. That has more than 4 million shares of the move as of this writing. For comparison, the company’s daily average trading volume is about 420,000 shares.
KDNY stock is up 58.2% as of Monday morning.
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On the date of publication, William White 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.
