Replies to post #230443 on Biotech Values

[DewDiligence]

Re: RARX /market dysfunction

Anybody buying RARX [on 3/18/20] and holding through the close because they really thought the deal was scheduled to close on March 30 was right for the wrong reason. There was no scheduled close date, just an announcement from RARX of when the antitrust waiting period was to expire if no action from the FTC.

Respectfully disagree. I thought it was clear that the FTC had found no new grounds on which to oppose the UCB-RARX deal because RARX would have had to issue a new 8-K disclosure if the FTC had found new grounds for opposing the deal.

Even if the deal closing had been delayed another 30 days (until late April) for procedural reasons, there was never a material risk that the deal wouldn’t close at all, IMO.

It follows that the $40.51 share price on 3/28/20 was irrational, for which my best explanation is dysfunction in the securities markets generally due to COVID-19 panic. Indeed, RARX’s share price rose 12% the very next day (3/19/20) despite the lack of any company-specific news or rumors.