Celator Pharmaceuticals Inc (NASDAQ:CPXX) Shares Surge on $1.5 Billion Acquisition Offer

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Celator Pharmaceuticals Inc (NASDAQ:CPXX) shares surged 71.59% to $30.08 on Tuesday after an acquisition announcement by Jazz Pharmaceuticals.

Celator Pharmaceuticals Inc (NASDAQ:CPXX)  is an oncology-focused biopharmaceutical company engaged in developing products to improve patient outcomes in cancer. CombiPlex, its technology platform,  enables the design and evaluation of optimized combinations incorporating traditional chemotherapy, as well as molecularly targeted agents to deliver anti-cancer activity.

Jazz Pharmaceuticals agreed to buy Celator Pharmaceuticals for roughly $1.5 billion after the company previously reported progress in its drug developments. Jazz Pharmaceuticals pledged to pay $30.25 a share in cash for the company, comprising a 72% premium to Celator’s previous closing share price of $17.53.

Earlier this year, Celator Pharmaceuticals reported positive results for a clinical trial of Vyxeos, a drug that aims to treat a blood cancer known as acute myeloid leukemia. This report led to strong gains of nearly 400% for Celator shares on that day. According to Celator Pharmaceuticals CEO Scott Jackson, the clinical and commercial expertise of Jazz Pharmaceuticals in hematology and oncology and its international infrastructure could help realize the potential of Vyxeos.

Celator Pharmaceuticals has a market cap of $1.28 billion with 42.47 shares outstanding. Share prices had been trading inside a 52-week range of $1.12 to $30.10 and appears poised to make new highs following this acquisition news and positive expectations for Vyxeos approval and commercial availability. Jazz Pharmaceuticals has a market cap of about $9 billion and has nearly $1 billion in cash, as of its latest earnings report for the first quarter.

For Jazz Pharmaceuticals CEO Bruce Cozadd, their acquisition could add a new orphan product for their company’s short-term and long-term revenue generation, especially since Celator Pharmaceuticals is preparing for US regulatory submissions for Vyxeos. The acquisition deal is expected to close in the third quarter of this year, pending approval from the company’s board and shareholders.

 

DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.

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