Drugmaker Optimer Pharmaceuticals Inc OPTR.O said it was exploring a sale and replaced its chief executive as part of a review of compliance issues, sending its shares up 19 percent.
The company's market value has halved to about $511.3 million since last April, when it sacked its co-founder Michael Chang as chairman after its former subsidiary Optimer Biotechnology Inc (OBI) granted him 1.5 million shares.
It had also removed its finance chief and a vice president for not acting despite having knowledge of the share transfer.
Optimer, which is known for its antibacterial drug Dificid, could potentially draw interest from drug makers focused on the antibiotics space, analysts said.
"We believe suitors would be interested in a transaction at these lower levels before OPTR regains market cap and a higher premium is required," Leerink Swann analyst Marko Kozul said.
The company estimated gross sales of Dificid, used to treat clostridium difficile-associated diarrhea and its sole product on the market, at $21.3 million for the fourth quarter ended December. The sales are poised to accelerate by mid-2013, analyst Kozul said.
Brian Skorney of Robert W. Baird & Co. named Pfizer as an interested company, given that Optimer's new CEO McKinnell served in the same capacity at the pharmaceutical giant between 2001 and 2006.
Pfizer has a prominent antibiotics portfolio that includes the popular Terramycin and Zithromax brands.
Suntrust Robinson Humphrey's Brian Lian said the most obvious bidder would be pure-play antibiotics firm Cubist Pharmaceuticals Inc CBST.O, which makes the drug Cubicin. He called Cubist the most strategic fit for Optimer.
Some analysts also said interested buyers could include Viropharma Inc VPHM.O as well as Astellas Pharma Inc (4503.T), which markets Dificid in Japan.
Optimer on Wednesday said Chairman Henry McKinnell would act as chief executive during its strategic review. He will replace Pedro Lichtinger, CEO since 2010.
The company also replaced Chief Compliance Officer Kurt Hartman with Meredith Schaum.
"I think the strategic alternatives announcement is more a result of determining that management was doing some things it should not have been doing and this is really a way for shareholders to get out of it," said Robert W. Baird's Skorney.
Optimer's independent directors had recommended management changes following compliance and conflict-of-interest issues observed during a review.
Optimer on Wednesday also estimated fourth-quarter net income of 2 cents per share. The company will report results on Thursday.
Analysts on average expect a loss of 38 cents per share, according to Thomson Reuters I/B/E/S.
J.P. Morgan and Centerview Partners will advise Optimer on the strategic review process, with Sullivan & Cromwell LLP serving as legal adviser.
Optimer's shares were up 12 percent at $12.01 in mid-day trading on the Nasdaq. The stock touched a high of $12.74 earlier in the day.
(Reporting by Zeba Siddiqui and Pallavi Ail in Bangalore; Editing by Joyjeet Das and Sriraj Kalluvila)