KDNY - Why Shares of Chinook Therapeutics Skyrocketed On Monday
2023-06-12 12:51:14 ET
Shares of Chinook Therapeutics (NASDAQ: KDNY) were up more than 57% early Monday afternoon after the healthcare company agreed to a $3.2 billion buyout offer from Novartis .
Chinook is a clinical-stage biotech company that specializes in treating kidney diseases. The company is being acquired by Novartis for $40 per share in cash, a premium of 67% over what the stock was trading for at the close of last week. The company said the deal could mean an additional $4 per share in cash through contingent rights, so it could be worth $3.5 billion. The enticement for Novartis was Chinook's pipeline to treat rare kidney diseases. The deal is expected to be completed in the second half of the year.
Chinook, while a clinical-stage company with little revenue, was on the cusp of being a commercial company. Its lead therapy, atrasentan, is in a phase 3 trial to treat IgA nephropathy (also known as Berger disease). This disease happens when the germ-fighting protein immunoglobulin A (IgA) builds up in the kidneys, causing swelling. The therapy is also in a phase 2 trial to treat proteinuric glomerular diseases, which can interfere with the clearance of waste products by the kidney. The drug is an endothelin receptor antagonist.
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Why Shares of Chinook Therapeutics Skyrocketed On Monday