Apellis Pharmaceuticals (APLS) shares soared on Tuesday after Biogen (BIIB) signed a definitive agreement to acquire the biopharmaceutical firm for about $5.6 billion in cash.
Biogen’s proposal values APLS shares at $41 each, representing a remarkable 140% premium over the price at which they closed on March 30.
BIIB announcement brings a much-needed reprieve for Apellis Pharma stock, which was otherwise down more than 20% versus the start of this year.
Is It Too Late to Invest in Apellis Pharma Stock?
For investors looking to jump in now, the ship has likely sailed, given that Apellis is hovering around the $41 deal price already.
Meanwhile, arbitrage spreads are razor-thin, signaling market participants are treating the Biogen deal as a sure thing.
Unless a rival “white knight” bidder emerges with a superior offer, which analysts view as highly unlikely given BIIB’s specific strategic fit, there’s hardly any upside left in APLS shares.
At this stage, the biotech stock is essentially a cash equivalent waiting for the deal to close in Q2.
Wall Street’s Stance on APLS Shares
Before Biogen’s bombshell announcement on March 31, Wall Street had a consensus “Moderate Buy” rating on Apellis Pharma shares.
But their mean price target was pinned at roughly $33, which means analysts — on average — didn’t see APLS surpassing the $40 mark on its own merits, at least not anytime soon.
The fact that Apellis is now trading nearly 21% above experts’ forecast reinforces the idea that its valuation is fully stretched and the premium is already baked in.
Why Biogen Stock Is the Better Buy Now
If you’re interested in playing Apellis Pharma’s transformative potential in geographic atrophy (Syfovre) or rare kidney diseases (Empaveli), a better bet now is Biogen stock.
While APLS stock is capped at $41, BIIB offers the actual upside from integrating its assets into its massive commercial infrastructure.
Biogen inched lower on the news today — a common reaction for the acquiring company — creating a more attractive entry point for long-term investors.
Loading up on BIIB will position you to capture growth tied to Apellis’s portfolio while benefitting from the giant’s existing stability and scale as well.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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