Ariad Pharmaceuticals Inc (NASDAQ:ARIA) Shares Surge on Takeda Takeover News

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Ariad Pharmaceuticals Inc (NASDAQ:ARIA) shares popped up 72.85% to $23.75 on Monday then pulled back 0.04% to $23.74 in after-hours trading. Share prices have been trading in a 52-week range of $4.37 to $23.81 so it’s already at the resistance. The company has a market cap of $4.73 billion at 194.20 million.

Ariad Pharmaceuticals Inc is an oncology company that is focused on transforming the lives of cancer patients with medicines. The Company’s product pipeline includes Iclusig (ponatinib), brigatinib, AP32788 and ridaforolimus.

Iclusig is a tyrosine kinase inhibitor that is approved in the United States, the European Union, Australia, Switzerland, Israel and Canada for the treatment of adult patients with chronic myeloid leukemia, and Philadelphia chromosome-positive acute lymphoblastic leukemia. Brigatinib is an investigational inhibitor of anaplastic lymphoma kinase. AP32788 is a TKI, which is designed as a targeted therapy for patients with non-small cell lung cancer with specific mutations in two kinases, epidermal growth factor receptor, or human epidermal growth factor receptor 2. Ridaforolimus is an investigational inhibitor of the mammalian target of rapamycin.

According to reports, Takeda Pharmaceuticals is considering acquiring Ariad Pharmaceuticals Inc as part of a deal worth $5.2 billion, or about $24 per share. This deal is expected to be completed by February this year as the boards of both companies have given the green light for the move that should offer Takeda a wide array of drugs and treatments related to hematology, as well as products to treat tumors.

This is a very exciting time for Takeda as we will broaden our hematology portfolio and transform our global solid tumor franchise through the addition of two innovative targeted therapies,” Takeda CEO Christophe Weber said in a statement. “Opportunities to acquire such high-quality, complementary targeted therapies do not come often, and we are very excited about the potential for this transaction to benefit patients, our shareholders and other stakeholders.”

The news triggered a bounce for Ariad Pharmaceuticals Inc, whose shares have taken a hit after members of Congress criticized the company over price hikes for the leukemia treatment Iclusig. Ariad Pharmaceuticals Inc raised the cost of the drug four times in 2016 to an almost $200,000 yearly cost, an increase of more than $80,000 over the last several years. There are two Ariad drugs critical to the deal with Takeda, but it looks like the coast is clear for the takeover pending regulatory approval.

We are very pleased to combine with Takeda, which will allow us to not only accelerate our mission to discover, develop and deliver precision therapies to patients with rare cancers, but also deliver immediate and meaningful value to our shareholders through a substantial cash premium. This exciting transaction is a testament to the hard work and dedication of Ariad’s talented team of employees. We have tremendous respect for Takeda, and I believe our shared commitment to innovation and research-driven cultures will provide for a smooth transition,” acknowledged Ariad Pharmaceuticals Inc President and CEO Paris Panayiotopoulos.

Alexander J. Denner, Ph.D., Chairman of the Board of Ariad, added that the transaction is a great outcome for shareholders of Ariad and Takeda since both companies are passionate about helping cancer patients. He explained that the talent and resources of Takeda combined with Ariad’s pipeline and people will accelerate the development of cancer treatments.

DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.

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