Why Neos Therapeutics Inc (NEOS) Shares Climbed 37% Today


Neos Therapeutics Inc (NASDAQ:NEOS) is a mover and shaker out on the Street today, with investors sparking the stock on an almost 37% upturn. The reason? PDL BioPharma (NASDAQ:PDLI) made a hostile bid to acquire Neos for $10.25 share in cash (40% upside from yesterday’s close). PDL first formally proposed to acquire Neos on June 23, 2017, but Neos’ board rejected the offer. PDL again proposed to acquire Neos for $10.25 per share following Neos’ equity raise, but that second bid was also rejected by Neos’s board, and PDL has therefore decided to go “hostile” and publicly announced its proposal.

According to PDL BioPharma, the acquisition of Neos is consistent with PDL’s stated strategy for growth and is a logical next step in the execution of its strategic plan. In particular, the Company believes that this acquisition would create an attractive pediatric platform and foundation for future growth. Based on its due diligence, PDL’s Board of Directors strongly believes that PDL’s backing and substantial financial resources would greatly augment the performance of the Neos product portfolio and allow more patients to benefit from Neos’ products.

On the ratings front, Neos has been the subject of a number of recent research reports. In a report released today, Cowen analyst Tyler Van Buren maintained a Buy rating on NEOS. Separately, Cantor’s Louise Chen assigned a Buy rating to the stock and has a price target of $20.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Tyler Van Buren and Louise Chen have a yearly average loss of 8.8% and 10.8% respectively. Buren has a success rate of 42% and is ranked #4248 out of 4700 analysts, while Chen has a success rate of 35% and is ranked #4612.

Overall, 5 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $22.00 which is 131.6% above where the stock opened today.

Neos Therapeutics operates as a pharmaceutical company, which engages in developing, manufacturing, and commercializing products using proprietary, extended-release drug delivery technology platform. It uses this technology to develop products for the treatment of attention deficit hyperactivity disorder (ADHD), including an extended-release orally disintegrating tablet.