Why did Biogen stock go up today?

Recording the biggest intra-day gain since June when the FDA approved its Alzheimer’s therapy Aduhelm, Biogen (NASDAQ:BIIB) shares closed at over a one-month high on the news of a potential M&A deal with South Korea’s Samsung Group.

Citing investment banking sources, The Korea Economic Daily reported Thursday that Biogen (BIIB) had approached Samsung to sell its shares, with a valuation of over $42B (50 trillion won).

Arguing that a deal “is not totally easy for either side,” Jefferies analyst Michael Yee warns there could be valuation difficulties for parties in the transaction.

As Biogen and Eisai advance another Alzheimer’s candidate called lecanemab , with late-stage anticipated in the fall of 2022, the binary nature of the readout could make any deal “very difficult to value,” Yee opines. He also argues that a contingent value right, or CVR, would be required to value different outcomes.

Meanwhile, Piper Sander analyst Christopher Raymond thinks that a potential acquisition of Biogen “wouldn’t be the craziest deal ever.”

“There is a long history of large caps that have run into growth or other difficulties, with investors leaving the stocks for dead, only for a larger player to swoop in and acquire the business,” he wrote, adding that the $42B price tag “sounds quite reasonable.”

Tradeable Contingent Value Rights were part of the M&A deal signed by Bristol-Myers Squibb in 2019 for its $74B acquisition of Celgene. Seeking Alpha