NEW YORK (TheStreet) -- Shares of a number of biopharmaceutical companies are climbing after drug maker Roche (RHHBY) agreed to buy its smaller peer, Intermune (ITMN) . InterMune focuses on developing treatments for respiratory and orphan fibrotic diseases.
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WHAT'S NEW: Roche agreed to buy InterMune for $74 per share in an all-cash transaction, the companies announced yesterday. InterMune's stock closed at $53.80 on Friday and the takeover price represents a premium of 38% to InterMune's closing price on August 22 and a premium of 63% to InterMune's closing price on August 12, the companies stated.
WHAT'S NOTABLE: On August 11, an investment blog, "Betaville," said that InterMune was rumored to be exploring strategic options. On August 13, Bloomberg reported that InterMune had received takeover bids from Roche, Sanofi (SNY) - Get Sanofi Sponsored ADR Report , GlaxoSmithKline (GSK) - Get GlaxoSmithKline plc Sponsored ADR Report and Actelion (ALIOF) . InterMune was evaluating the bids, the news service stated at the time.
ANALYST REACTION: In a note to investors earlier today, research firm Bernstein wrote that the deal makes sense strategically for Roche. The transaction "rounds out" the company's respiratory based offerings and it makes sense for the company to diversify, according to the firm, which kept an Outperform rating on Roche.
PRICE ACTION: In mid-morning trading, InterMune soared 36% to $73 and Roche shares trading in New York added 0.7% to $36.56. Meanwhile, Gilead (GILD) - Get Gilead Sciences, Inc. (GILD) Report rose 2.6% to $106.67, Celgene (CELG) - Get Celgene Corporation Report advanced 2% to $93.50, MannKind (MNKD) - Get MannKind Corporation Report gained 3.4% to $7.36, and Ariad Pharmacticals (ARIA) climbed 3% to $6.09.
Reporting by Larry Ramer.
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