Vitae Pharmaceuticals Jumps 158% on Allergan plc Deal

Allergan plc (AGN) has agreed to buy Vitae Pharmaceuticals Inc (VTAE) for nearly $640 million

by Alex Eppstein

Published on Sep 14, 2016 at 10:33 AM
Updated on Jun 24, 2020 at 10:16 AM

Shares of Vitae Pharmaceuticals Inc (NASDAQ:VTAE) have absolutely blown up, after Allergan plc Ordinary Shares (NYSE:AGN) agreed to buy the drugmaker for roughly $640 million in cash, or $21 per share. After being halted in pre-market action, VTAE is now the top percentage gainer on the Nasdaq, more than 158% higher at $20.91 -- fresh off a new annual high of $20.93 -- while AGN has advanced 2.6% at $246.45.

Suffice it to say, VTAE short sellers have gotten toasted. While some of these bears got out in the nick of time -- short interest on the stock fell nearly 10% in the latest report period -- a still-considerable 6.5% of its float is dedicated to short interest. By contrast, five of six analysts rated the shares a "strong buy" heading into today -- and traders who followed their advice are being handsomely rewarded.

The brokerage bunch has also been high on AGN. Eighty percent of analysts tracking the stock consider it worthy of a "buy" or better endorsement, with not a single "sell" opinion to be found. Likewise, options traders have been wagering on upside for the shares. AGN's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 2.29, near the top one-fifth of all readings taken in the prior year.

That said, Allergan plc Ordinary Shares (NYSE:AGN) hasn't fared nearly as well on the charts as Vitae Pharmaceuticals Inc (NASDAQ:VTAE). Despite sharp gains this morning, the former stock has shed more than 21% year-to-date. Plus, AGN's formerly supportive 50-day moving average looks like it may be switching roles to act as resistance.

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