Shares of pharmaceutical company Impax Laboratories Inc. (IPXL) soared on Thursday, Aug. 31, after China's Shanghai Fosun Pharmaceutical (Group) Co. Ltd. disclosed a passive 5.19% stake in the firm.

According to a 13G filing on Thursday, Shanghai Fosun owns 3.85 million shares of Hayward, Calif.-based Impax.

Impax declined to comment on shareholder positions.

Fosun International Ltd. owned 300,000 shares of Impax as of end-June, according to its 13F filing on Aug. 11. Fosun International is Shanghai Fosun Pharmaceutical's single largest shareholder, with a 38.83% stake as of end-2016, according to Fosun International's annual report issued on April 20.

Impax traded as high as $22.15 on Thursday, before finishing the trading session at $ 21.65, up 20.6% from Wednesday's close .

In a note, Janney Montgomery Scott LLC analyst Ken Trbovich attributed the jump in Impax's stock partly to short covering, pointing out that short interest had increased by 1 million shares in early August after the stock went up from the low-teens in mid-June to $20 by end-July.

"So why would the shorts consider covering so quickly? SFP is a unit of Fosun International, one of China's most aggressively acquisitive conglomerates," Trbovich wrote.

"Moreover, SFP made clear its intention to continue its international expansion with a focus on U.S. and European markets for its generic products," he added.

A collaboration between Impax and Shanghai Fosun could be a potential outcome, Trbovich wrote.

Impax on Aug. 9 reported second-quarter adjusted income per share of $0.18, compared with $0.21 in the year-ago period. Revenue grew 17.1% year-over-year to $202.1 million.

The 13G filing came after Shanghai Fosun confirmed on Aug. 14 that its subsidiary, Fosun Industrial Co. Ltd., made a non-binding bid for a stake in Atlanta-based drugmaker Arbor Pharmaceuticals LLC on July 19.

The filing also came on the heels of a Bloomberg report on July 31 that India was "poised to reject" Shanghai Fosun's planned purchase of Indian drug company Gland Pharma Ltd. Shanghai Fosun in July of last year agreed pay up to $1.26 billion for a majority stake in Gland.

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