Why Spark Therapeutics Stock Soared 137% in February
What happened
Spark Therapeutics (NASDAQ: ONCE) stock outpaced the market by a wide margin last month, gaining 137% compared to a 3% spike in the S&P 500, according to data provided by S&P Global Market Intelligence.
The increase put shareholders back in significantly positive territory, with returns of over 70% in the past year versus a 3% increase in the broader market.
So what
Last month's rally came as a result of the biotech company announcing an agreement to be purchased by Roche Holdings (NASDAQOTH: RHHBY) for nearly $5 billion, or $114.50 per share. That price equates to a 122% premium over the stock's value on trading day prior to the deal's announcement .
Now what
Spark Therapeutics shareholders should see their stock holdings convert to cash at that $114.50 price when the deal closes sometime in the second quarter of 2019. After that, the company will continue to operate as an independent group within Roche Holdings, but will benefit from its parent's global reach as it seeks to better commercialize treatments like its Luxturna genetic eye disease drug. That deal ensures positive returns for all shareholders, which counts as a solid win in the volatile biotech world.
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Demitrios Kalogeropoulos 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.