Outlandish Logicbio premium looks like an outlier

 It is tempting to suggest that opportunistic takeovers of companies laid low by adverse market conditions generate huge share price premiums for those investors who keep the faith. Certainly yesterday’s move by Astrazeneca on Logicbio, done at an astonishing 667% premium to the previous day’s close, appears to back this up. However, broader data compiled by Evaluate Pharma suggest that Logicbio is an outlier, and takeover premiums this year, a turbulent time for biotech, have tended to average around the 100% seen in 2021. It seems that, whatever the market conditions, sellers adjust their view and apply a typical premium to the prevailing economic reality. This year, only the acquisitions of Epizyme and Checkmate Pharmaceuticals featured premiums well above 100% over the previous day’s close. Both groups had suffered significant share price falls before being bought out. Logicbio, whose GeneRide technology it says can bring about precise gene insertions using a cell’s natural DNA repair process, is also a win largely for short-term holders: the biotech had floated at $10 and was trading above Astra’s offer price as recently as January, but in August admitted that it had less than a year’s cash left.

The biggest takeover premiums of 2022* so far
Target company	Acquirer	Deal value ($m)	Premium (vs prior day close)	Premium (30-day avg)
Checkmate Pharmaceuticals	Regeneron	250	336%	216%
Epizyme	Ipsen	247	158%	144%
Turning Point Therapeutics	Bristol Myers Squibb	4,100	122%	122%
Chemocentryx	Amgen	4,000	116%	111%
F-Star Therapeutics	Sino	161	79%	108%
Global Blood Therapeutics	Pfizer	5,400	7%	82%
La Jolla Pharmaceutical	Innoviva	149	84%	79%
Aerie Pharmaceuticals	Alcon	770	39%	62%
Zogenix	UCB	1,900	66%	57%
Sierra Oncology	GSK	1,900	39%	53%
Note: *until the end of Q3 2022, considering deals with disclosed valuations. Source: Evaluate Pharma. https://www.evaluate.com/vantage/articles/news/deals-snippets/outlandish-logicbio-premium-looks-outlier