Why Endo International and BioSpecifics Technologies Stocks Soared Today

What happened

Shares of Endo International (NASDAQ: ENDP) and BioSpecifics Technologies (NASDAQ: BSTC) were soaring 13.9% and 45.1%, respectively, as of 3:31 p.m. EDT on Monday. The big gains came after Endo announced plans to acquire BioSpecifics Technologies for $540 million net of cash acquired in the deal.

So what

It makes perfect sense why BioSpecifics Technologies share price took off. Endo's offer of $88.50 per share represented a 45% premium over the closing price of the small biotech stock on Friday.

Fingers holding two jigsaw puzzle pieces close to each other and ready to lock into place.

Image source: Getty Images.

Why did Endo's share price jump? Investors appeared to really like the company's move to acquire BioSpecifics.

The match between the two companies seems to be a good one. Endo and BioSpecifics have been partners since 2004. BioSpecifics originally developed collagen-based therapy Xiaflex, which was licensed and marketed by Endo. Another product included in the collaboration agreement between the two drugmakers, injectable cellulite treatment Qwo, has already won approval from the U.S. Food and Drug Administration (FDA) and is on track to be launched commercially in the first half of next year.

Endo CEO Blaise Coleman stated that the acquisition of BioSpecifics is part of the company's strategy to invest in "the significant long-term growth potential" of Xiaflex and Qwo. Coleman added that the deal will immediately boost Endo's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and "create significant value for shareholders of both organizations."

Now what

Endo's planned acquisition of BioSpecifics has already been unanimously approved by the boards of directors of both companies. A major shareholder of BioSpecifics, the Edwin H. Wegman Marital Trust, has also already committed to tendering its shares in support of the deal. The two companies expect the transaction to close later this year.

10 stocks we like better than Endo International
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Endo International wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of September 24, 2020

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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

In This Story


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More