Are Shareholders Getting Enough From the Ra Pharma Acquisition?

Ra Pharmaceuticals Inc. (NASDAQ: RARX) shares more than doubled on Thursday after the announcement that UCB would acquire the firm. The boards of directors of both companies have unanimously approved the transaction, which is still subject to approval by Ra Pharma shareholders and to obtaining antitrust clearance and other customary closing conditions.

Under the terms of the deal, Ra Pharma shareholders will receive $48 in cash for each share, making an aggregate transaction price of $2.5 billion, or a value of $2.1 billion net of Ra Pharma cash.

The cash consideration represents an approximately 93% premium to Ra Pharma shareholders based on the 30-day volume weighted average closing stock price of Ra Pharma prior to signing.

UCB and Ra Pharma expect to complete the transaction by the end of the first quarter of 2020.

Jean-Christophe Tellier, UCB CEO, commented:

Ra Pharma is an excellent strategic fit addressing multiple areas of UCB’s patient value growth strategy. Upon closing, the acquisition will add to our strong internal growth opportunities – six potential product launches in the next five years, strengthening our neurology and immunology franchises with late and early-stage pipeline projects. In addition, the combination will provide us with the opportunity to become a leader in treating people living with myasthenia gravis, an auto-antibody mediated neurological orphan disease with high unmet medical need, as well as adding a highly productive technology platform to our innovation engine.

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Shares of Ra Pharmaceuticals traded up 101% to $45.75 on Thursday, in a 52-week range of $11.27 to $46.00. The consensus price target is $41.78.

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