Shares of Optimer Pharmaceuticals Inc OPTR.O rose as much as 24 percent after a Bloomberg report said GlaxoSmithKline Plc (GSK.L) and Cubist Pharmaceuticals Inc CBST.O were among those interested in buying the antibiotic maker.
Optimer, the maker of diarrhea drug Dificid, aims to get as much as $1 billion in a possible auction, the report said, quoting two unnamed sources. (link.reuters.com/cys96t)
The report also named AstraZeneca PLC (AZN.L) and Japan's Astellas Pharma Inc (4503.T) as potential buyers.
Robert W. Baird & Co analyst Brian Skorney said the $1 billion target implied a price of about $18 per share, which, he felt, would be difficult to achieve.
"I think we can see a $15 to $16 (per share) deal get done," Slorney said, calling the jump in Optimer's stock price a probable overreaction.
Tuesday's gains in the stock price eclipsed the 13 percent jump it had seen on February 27, when the company first said it would explore a sale after replacing its CEO.
The shares were up 18 percent at $13.84 in afternoon trade on the Nasdaq, well above their closing price of $12.13 on February 27.
"I think bankers are probably leaking some information to try drum up some more enthusiasm to get a higher deal value than what is already on the table," Skorney said.
Analysts have previously identified Pfizer Inc (PFE.N), Viropharma Inc VPHM.O and Cubist as potential suitors for Optimer.
"Anyone who has commercial infrastructure selling hospital-based antibiotics could be a bidder here," Skorney said.
"Astellas is already partnered with Optimer and since they already own most of the worldwide rights, it makes sense to consolidate everything."
Similarly, he said, Pfizer Inc (PFE.N) had a number of antibiotics that would go generic over the next couple of years, so bidding for Optimer would make sense for it too.
Skorney said the cost, and the benefit, of the acquisition would be trivial for companies like Glaxo and Johnson & Johnson (JNJ.N), but Forest Laboratories FRX.N and Cubist would have to pay over 10 percent of their current valuation for Optimer.
Optimer spokesman David Walsey was unavailable for comment.
Cubist spokeswoman Julie DiCarlo said the company did not comment on speculation or rumors related to mergers and acquisitions. GSK declined to comment.
Dificid, which treats adult patients who contract infectious diarrhea in hospitals, accounted for $62.4 million in sales in 2012. The company is expected to generate sales of $310 million from the drug by 2017, according Thomson Reuters data.
Optimer is also testing to see if the drug can prevent diarrhea in patients under 18 years and whether it can treat it in patients undergoing bone marrow transplants.
(Editing by Sreejiraj Eluvangal)