NEW YORK (TheStreet) -- Shares of Raptor Pharmaceutical (RPTP) were surging 20.27% to $8.96 on heavy trading volume early-afternoon Monday as Horizon Pharma (HZNP) agreed to purchase the Novato, CA-based biopharmaceutical company for $800 million, or $9 per share.
The transaction is slated to close in the fiscal 2016 fourth quarter, Horizon Pharma said in a statement.
Raptor is expected to expand the Dublin-based specialty pharmaceutical company's rare disease business and grow its international presence.
Tim Walbert, Horizon's CEO, has said he wants to heighten the company's focus on rare diseases, shifting it away from primary care where pricing pressure has ramped up, according to Fortune.
Raptor's Procysbi treatment has been approved in the U.S. to treat a rare metabolic disorder. Its other drug, Quinsair, is approved in Europe and Canada for the treatment of chronic pulmonary infections in adults with cystic fibrosis, Fortune reports.
Horizon said it will fund the acquisition using $675 million of external debt along with cash on hand.
Shares of Horizon were advancing 7.73% to $18.59 in early-afternoon trading on Monday.
About 38.63 million of Raptor's shares have changed hands so far today vs. its average volume of 1.14 million shares per day.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
The team rates Raptor Pharmaceutical as a Sell with a ratings score of D-. This is driven by several weaknesses, which it believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks it covers. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: