Acadia Pharmaceuticals' ($ACAD) shares rocketed up nearly 20% on Tuesday based on some news tied to two investor conferences. But the market wasn't reacting to anything the company said, instead reading into a pair of cancellations and deducing that a buyout might be in the making.
In the latest example of biopharma's growing reputation for fast and frothy takeouts, investors pushed Acadia's shares to an all-time-high close of $45.88 on Tuesday in response to the following facts: The biotech was scheduled to present at last week's Cowen Healthcare Conference and never showed up, and it pulled out of Tuesday's Roth Capital Partners showcase at the last minute, according to Bloomberg. That was enough to convince many investors that Acadia might be in the midst of a buyout negotiation, potentially with partner Allergan ($AGN) and its soon-to-be owner, Actavis ($ACT).
And while that's certainly not impossible, there's no real support for such an inference. Companies pull out of investor meetings all the time, and even when they do so for a weighty reason, it's not always good news for shareholders, as Sunshine Heart ($SSH) demonstrated last week.
Acadia, for its part, didn't respond to phone and email messages seeking comment on the cancellations.
The rumors come amid a protracted boom in biopharma dealmaking, headlined by AbbVie's ($ABBV) recent move to spend $21 billion on Pharmacyclics ($PCYC) for what amounts to a 50% stake in a blockbuster cancer drug. With valuations reaching ever higher, investors are quick to latch onto whatever could be the next big acquisition target in biotech, pushing the shares of small drug developers skyward.
Meanwhile, Acadia is planning to file its lead candidate, the Parkinson's disease treatment pimavanserin, with the FDA this quarter. The drug is designed to treat psychosis tied to the neurodegenerative disease, and its mid-stage promise led the FDA to grant its coveted breakthrough-therapy designation, promising Acadia a speedy review and easy access to top agency officials. The company, whose market cap now sits at $4.6 billion, is working with Allergan on a Phase II chronic pain drug and a Phase I glaucoma therapy.
- read the Bloomberg story