Zogenix shares soared 65.7% in the last trading session to close at $25.92. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2.4% gain over the past four weeks.
Shares of Zogenix surged following the announcement of its proposed acquisition by Belgium-based pharmaceutical company UCB in an all-cash transaction for approximately $1.9 billion. The deal comprises of an upfront cash payment of $26 per share of Zogenix and a milestone payment of $2 per share contingent on Zogenix’s sole marketed drug, Fintepla, securing label expansion in the European Union before 2023-end for the treatment of seizures associated with Lennox-Gastaut syndrome.
This drugmaker is expected to post quarterly loss of $0.80 per share in its upcoming report, which represents a year-over-year change of +32.2%. Revenues are expected to be $28.78 million, up 238.6% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Zogenix, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ZGNX going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>