Vanda Pharmaceuticals stock: why is it up 20% on Thursday?

Vanda Pharmaceuticals Inc (NASDAQ: VNDA) is up nearly 20% on Thursday following a report that Cycle Pharmaceuticals Ltd is interested in taking over the Washington-based company. 

Vanda Pharmaceuticals stock valued at $8.0

Anonymous sources told Bloomberg this morning that Cycle Pharma has made an unsolicited buyout offer that values $VNDA at about $460 million. 

The U.K. based company is willing to pay $8.0 per share for Vanda Pharmaceuticals that translates to a near 60% upside on its previous close. 

Note that Future Pak offered to acquire Vanda Pharmaceuticals for up to $7.75 a share in May. But its management rejected that proposal citing undervaluation. 

Cycle is already engaged with financial advisers over its unsolicited approach, as per people familiar with the matter. Vanda Pharmaceuticals stock is now trading at a year-to-date high. 

$VNDA to present at a Global Health Conference today

Sources that talked to Bloomberg today on condition of anonymity also confirmed that an agreement between Cycle Pharmaceuticals and Vanda Pharmaceuticals may be announced as soon as Thursday. 

Representatives from neither Cycle nor $VNDA have so far commented on the report. Vanda Pharmaceuticals is scheduled to speak at the 2024 Jefferies Global Healthcare Conference this afternoon. 

In May, the potential acquiree reported its financial results for the first quarter that came in shy of Street estimates. Vanda swung to a net loss of $4.1 million in its fiscal Q1 versus $3.3 million of net income a year ago. 

Vanda Pharmaceuticals stock is not very widely covered by the Wall Street analysts.

Overview of Vanda Pharmaceuticals balance sheet

Vanda Pharmaceuticals ended its first financial quarter with $394.1 million in cash. Mihael H. Polymeropoulos - its chief executive said at the time:

Last month, $VNDA also reported encouraging data for its motion sickness trial. The Phase III study established its tradipitant or "Motion Serifos" as significantly effective in preventing vomiting in participants on boat trips under varied sea conditions.

The pharmaceuticals firm announced to have received PONVORY marketing rights in May as well. Shares of Vanda Pharmaceuticals Inc do not pay a dividend yield at writing.