Why Ardea Biosciences Shares Skyrocketed
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: The deal values Ardea at $32 per share and represents a whopping 54% premium to its Friday closing price. AstraZeneca shares have acted sluggishly over the past year on worries over its big patent cliff and relatively weak pipeline, so today's move serves as a good step toward easing some of those concerns.
Now what: While Ardea shares are likely all popped out, AstraZeneca might be worth looking into. "We're building some momentum here in R&D," AstraZeneca's research head Martin Mackay said today. "I would be disappointed if we didn't announce further deals by the end of this year. We've taken our hits but we're turning a corner." More important, with a cheapish P/E of six and a juicy dividend yield of 8.5%, AstraZeneca shares aren't exactly priced for a big turnaround.
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