Flexion Therapeutics (FLXN) stock rocketed to an 18-month high Thursday on rumors that it accepted a $1 billion offer from French drugmaker Sanofi (SNY) to acquire it.
Shares of Flexion closed up 33.4%, at 26.25, and rose another fraction in after-hours trading. Flexion stock has traded below 25 since September 2015. Sanofi stock, on the other hand, stood still in after-hours trading after closing down a fraction, at 44.51.
One unidentified source said Sanofi put down a bid in the "mid-30s" per share, with a final price pending due diligence, FiercePharma reported. Sanofi had no comment. Representatives of Flexion didn't immediately return a request from IBD for comment.
The rumored bid follows three months after Sanofi lost out on acquiring Swiss biotech Actelion in December following a contentious bidding process. Janney analyst Ken Trbovich says the potential offer wouldn't be a total surprise.
"Sanofi represents a logical potential acquirer given its U.S. leadership in the single injection market for hydraulic acid-based products that are also used to treat osteoarthritis pain," he said in a research report. Flexion's pipeline is focused on musculoskeletal conditions including osteoarthritis.
IBD'S TAKE: Flexion has a middling IBD Composite Rating of 54, meaning it ranks in the middle of all stocks in terms of key growth metrics. The biotech leader is Celgene with a CR of 99 out of a best-possible 99. Head to the Stock Checkup for a list of the top five.
Last year, Sanofi had about $11.1 billion in cash and is set to receive an additional $5.1 billion in an agreement to swap assets with Boehringer Ingelheim.
"Thus, Sanofi has the cash and has certainly shown an active interest in pursuing acquisitions after (Dow component) Johnson & Johnson (JNJ) successfully thwarted Sanofi's efforts to acquire Actelion last year," he said. Sanofi was also rumored at one point to be looking at BioMarin (BMRN).
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