TESARO (TSRO) Stock Up on Rumors of Buyout Offer From Roche

Buy or sell dice

TESARO, Inc. 's TSRO shares rallied 16.3% on Jun 20 on rumors of a potential acquisition offer from Roche RHHBY , as reported by . The article on the website states that Roche may announce an offer soon.

Roche is looking to strengthen its oncology portfolio through acquisitions.

Roche has recently offered to buy the remaining stake in molecular information company, Foundation Medicine FMI for $2.4 billion, which will help Roche to develop personalized cancer drugs using Foundation Medicine's genomic profiling expertise.

Why Roche May be Interested in TESARO?

Tesaro has long been considered an attractive acquisition target by the investment community.

TESARO received a major boost with the approval of its PARP inhibitor, Zejula, in the United States in March last year. The drug is available as maintenance therapy for ovarian cancer treated with platinum-based chemotherapy. The drug has shown potential with commendable sales growth and has gained a majority share in the PARP inhibitor segment. The drug was also approved in Europe in November 2017.

Furthermore, TESARO is developing Zejula for the treatment of ovarian cancer in first-line setting. The company is also focused on developing the drug as monotherapy or in combination with PD-L1 antibodies beyond ovarian cancer in breast cancer, non-small cell lung cancer and bladder cancer.

The company has collaborations with Roche and Merck MRK for developing Zejula in combination with Tecentriq and Keytruda, respectively. Moreover, TESARO is also developing its own anti-PD-1 antibody, TSR-042, in several cancer indications.

The performance of Zejula in its approved indication and ongoing clinical studies in prospective indications makes TESARO an attractive acquisition target for Roche.

However, several large pharma companies now have ample cash in hand (following the tax overhaul).This increases the probability of other companies rivaling a potential bid from Roche.

TESARO, Inc. Price

TESARO, Inc. Price | TESARO, Inc. Quote

TESARO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

A look at TESARO's share price movement so far this year shows that the company has underperformed the industry . While the stock fell 43.9%, the industry declined 5.4%.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Foundation Medicine, Inc. (FMI): Free Stock Analysis Report

Roche Holding AG (RHHBY): Free Stock Analysis Report

Merck & Co., Inc. (MRK): Free Stock Analysis Report

TESARO, Inc. (TSRO): Get Free Report

To read this article on click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.