Shares of Checkpoint Therapeutics (NASDAQ: CKPT) spiked after announcing a major acquisition by Indian-based Sun Pharmaceutical Industries.
Investors enjoyed a well-over 65 per cent increase after Monday’s announcement of Sun Pharma’s agreement to buy the company in an all-cash USD$355 million deal, with additional payouts that could extend the price to USD$416 million.
Sun Pharma announced it will pay an initial $4.10 per share, representing a 66 per cent premium over Checkpoint’s closing price on the previous Friday. This premium reflects Sun Pharma’s confidence in Checkpoint’s value and future potential.
Additionally, the deal includes a contingent value right (CVR) that could provide shareholders with an extra $0.70 per share if Checkpoint’s lead drug, cosibelimab (branded as UNLOXCYT), gains regulatory approval in Europe before certain deadlines. This upside potential has further fuelled excitement around the stock, as it suggests room for even greater returns beyond the initial payout.
The timing of the acquisition aligns with a significant milestone for Checkpoint Therapeutics, including the recent U.S. Food and Drug Administration (FDA) approval of UNLOXCYT.
This immunotherapy drug, designed to treat adults with metastatic or locally advanced cutaneous squamous cell carcinoma (cSCC) who are not candidates for curative surgery or radiation, marks a breakthrough for the company.
The FDA nod validates Checkpoint’s focus on developing novel treatments for solid tumour cancers and enhances its appeal as an acquisition target.
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Stock bounces despite larger market malaise
Following the announcement, Checkpoint Therapeutics’ stock surged in premarket trading on Monday.
Social media sentiment from traders and analysts noted the stock’s 63 per cent jump shortly after the news broke. The combination of the acquisition premium and the FDA approval has created a perfect storm of positive momentum.
Meanwhile, broader market conditions show volatility, with the Dow dropping 900 points and the Nasdaq plunging 4 per cent amid economic concerns and trade policy uncertainties. Checkpoint’s upward movement stands out against this backdrop. It demonstrates the strength of the acquisition news as a counterweight to prevailing market pressures.
Checkpoint Therapeutics is a clinical-stage immunotherapy and targeted oncology company. It has been working to bring novel therapies to market, and the deal represents a validation of its efforts.
The acquisition provides immediate shareholder value and also ensures that Checkpoint’s innovations will benefit from Sun Pharma’s global reach. The deal is expected to close in the second or third quarter of 2025, pending regulatory approvals and customary conditions.
For investors, the acquisition raises questions about fairness. Firms like Halper Sadeh LLC and the Ademi Firm are investigating whether the USD$4.10 per share offer adequately reflects Checkpoint’s long-term value. However, the market response suggests shareholders view the deal as a win, especially including the premium and potential CVR payout.
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Cancer market continues to grow
According to Grandview Research, the global cancer immunotherapy market was valued at approximately USD$125.69 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 8.3 per cent, reaching over USD$220 billion by 2030.
Furthermore, the targeted oncology market, encompassing precision medicine approaches, was estimated at around USD$80 billion in 2023 and is expected to exceed USD$160 billion by 2030, growing at a CAGR of 10-12 per cent.
The market is growing because cancer diagnosis and incidents are growing.
In the U.S., about 1,958,310 new cancer cases and 609,820 cancer deaths are estimated to occur in 2023.
Advancements in immunotherapy are producting positive changes in treatment options. A few of these include checkpoint inhibitors like Merck‘s (NYSE: MRK) Keytruda and Bristol-Myers Squibb‘s (NYSE: BMY) Opdivo. Furthermore, Roche (OTCMKTS: RHHVF) leads with Tecentriq, while smaller biotech firms like Iovance Biotherapeutics (NASDAQ: IOVA) compete in niche spaces.
Startups are also innovating in this field. Breath Diagnostics, a Kentucky-based firm, is developing OneBreath technology for early lung cancer detection. Other notable private players include Torque Therapeutics, advancing engineered T-cell immunotherapies, and Palleon Pharmaceuticals, which focuses on glyco-immunology.
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joseph@mugglehead.com
