Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Immunomedics, Inc. Jumped Higher Today

What happened

Immunomedics (NASDAQ: IMMU  ) ended the day up 19.5% after a judge ruled that the biotech can't close its deal with Seattle Genetics (NASDAQ: SGEN  ) quite yet.

So what

The stock price going up after the deal was temporarily blocked may seem counterintuitive considering the deal for IMMU-132 was pretty solid, with Immunomedics getting $250 million upfront plus other milestone payments that could make the deal worth about $2 billion. And Seattle Genetics is also on the hook for royalty payments if the drug is eventually approved.

But investors are clearly betting that the judge pausing the deal for 30 days will ultimately result in a better deal -- or perhaps a full sale of the company at a higher price. venBio Select Advisor, which brought the lawsuit to stop the deal, claiming that it was a bad deal for shareholders, is moving to take over the board.

Earlier this month, the activist investor announced that its four nominees had enough votes to be elected to the board. Immunomedics countered with claims that venBio had "interfered with the voting franchise of Immunomedics' stockholders and has irreparably tainted the potential outcome of the company's 2016 Annual Meeting of Stockholders."

Two businessmen arm wrestling

Image source: Getty Images.

Now what

Investors should be careful jumping into this board-fight soap opera. It seems like a bit of a gamble to bet on venBio being able to find another company willing to pay more to license IMMU-132 or an outright purchase of the company. If Seattle Genetics got such a good deal, you'd expect its share price to fall on the news, but the biotech ended the day down just 0.5%.

10 stocks we like better than Immunomedics
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 10 best stocks for investors to buy right now...and Immunomedics wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of February 6, 2017.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 4007064, ~/Articles/ArticleHandler.aspx, 3/23/2017 12:20:11 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
Change up DOW 20736.5 75.2 0.4%
Change up S&P 500 2356.5 8.1 0.3%
Change up NASD 5838.5 16.8 0.3%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

3/23/2017 12:04 PM
IMMU $6.81 Up +0.39 +6.07%
Immunomedics CAPS Rating: ***
SGEN $63.88 Up +0.85 +1.35%
Seattle Genetics CAPS Rating: ***

Article registration testing

Revisit this page

Clear article's cache and revisit this page

Or, visit the current page, forcing Test ID to article:interrupt:106919 and

Tookie Value = 58440472533757201009316409891459