Why Immunovant Stocks Are Soaring Today

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What happened?

Shares of a clinical-stage biopharmaceutical company Immunovant (NASDAQ: IMVT) are on fire Monday. As of 12:20 p.m. EST, the drugmaker’s stock was up 11.7%, after rising 44% earlier today. Immunovant has not given any news, but its majority shareholder, Roivant Sciences, has announced that it will offer to buy back the remaining shares of Immunovant that it does not already own.

So what

Roivant Sciences is a private biopharmaceutical company that currently owns 57.5% of the outstanding shares of Immunovant. In a filing today with the Securities and Exchange Commission (SEC), Roivant expressed a desire to buy out the 42.5% stake in Immunovant that it does not currently own. Roivant did not say how much the proposed transaction would be worth.

But the company said its offer would represent a premium over Immunovant’s current share price. This explains why investors are now bidding on the shares of Immunovant. However, there’s still a lot we don’t know about this potential deal: when it’ll be officially announced (i.e. if it’s approved at all) and how good Roivant’s offer will be. generous.

Image source: Getty Images.

Now what

The news of a potential takeover may not be all that bad for Immunovant shareholders. The company recently hit a major roadblock when it announced it would temporarily halt some of its clinical trials for IMVT-1401, a potential treatment for thyroid eye disease and the company’s lead pipeline candidate. . The decision came after Immunovant recorded elevated total cholesterol and LDL levels in patients treated with IMVT-1401.

LDL is a form of cholesterol, and high levels of it can be very harmful. The stock of Immunovant dived as a result of these developments, and although the healthcare company stated that he plans to continue development of IMVT-1401, recent events have, at the very least, delayed the progress of the experimental treatment. Of course, Roivant is aware of these problems, and then some. As the company stated in its documents to the SEC: “As a [Immunovant’s] a controlling shareholder, Roivant has received non-public information about the Issuer and its flagship product candidate. “

It is not clear whether this non-public information was positive or negative. But the uncertainty surrounding the future of IMVT-1401 was not favorable to Immunovant’s stock price. Talks about a potential acquisition are the next best thing for the company’s stock over the past month.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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