Why Five Prime Therapeutics Stock Is Skyrocketing Today


What happened

Shares of Five Prime Therapeutics (NASDAQ:FPRX) were skyrocketing 78% higher as of 11:22 a.m. EST on Thursday. The huge jump came after Amgen (NASDAQ:AMGN) announced plans to acquire Five Prime for close to $1.9 billion. 

So what

Some investors might have sensed that something good was on the way for Five Prime Therapeutics in recent weeks. The biotech stock fell more than 8% year to date a couple of weeks ago. Between then and market close on Wednesday, though, shares had jumped around 20% with no obvious news to fuel the gain.

Woman drawing a picture on a wall of a big fish about to swallow a small fish.

Image source: Getty Images.

Regardless, today’s announcement is certainly great news for Five Prime Therapeutics shareholders. Investors appear to also think it’s a good move for Amgen. 

The big biotech will pick up Five Prime’s crown jewel, bemarituzumab, with the acquisition. Bemarituzumab is an antibody therapy targeting gastric cancer and other types of solid tumors. Five Prime reported positive phase 2 results for the experimental drug in November 2020.

Now what

Amgen and Five Prime Therapeutics expect the transaction will close by the end of the second quarter of 2021. In the meantime, Five Prime will probably continue its discussions with regulatory agencies about advancing bemarituzumab into a pivotal late-stage clinical study.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

View more information: https://www.fool.com/investing/2021/03/04/why-five-prime-therapeutics-stock-is-skyrocketing/

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