Myovant Sciences Rockets After Rejecting Lowball Sumitovant Biopharma Takeover Bid

Myovant Sciences Rockets After Rejecting Lowball Sumitovant Biopharma Takeover Bid

Sumitovant offered to pay $22.75 per share. The bid "significantly undervalues the company" and isn't in the company's best interest, Myovant said in a news release. But the company also said it's willing to entertain new offers.

"We think Sumitovant's offer appears somewhat opportunistic, and bullish investors may be able to argue that Myovant could sell for a premium to the initial $22.75 per share bid," she said in a report to clients.

Sumitovant owns 52% of Myovant following a December 2019 loan agreement with Sumitovant's parent group, Sumitomo Pharma. The proposal values MYOV stock at a 27% premium to its closing price on Friday.

The "opportunistic buyout proposal" could stoke additional bids, Ruiz said.

"We also believe that Myovant could be in a favorable position to negotiate thanks to multiple potential value drivers over the next 12 months," she said.

Among those, Ruiz noted the recent FDA approval for endometriosis drug Myfembree and a $100 million regulatory milestone payment from Pfizer. The latter brings Myovant's cash position up to about $500 million. Further, the U.S. launch of prostate cancer drug Orgovyx is going well. She sees Orgovyx as a potential blockbuster drug.

Importantly, the FDA is also considering Myfembree as a treatment for uterine fibroids and the company is running a contraceptive study with results expected in 2024-25.

The news sent MYOV stock to its highest point since last October. Shares bottomed out in May and have trended higher since, according to MarketSmith.com.

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