Intereconomia, a financial news blog with a questionable history of M&A predictions, claims that it has been told by sources that an acquisition of Akorn by a private equity firm could “materialize in the next three or four weeks,” according to a google translation of the article. The sources said that bank financing has already been approved for the acquisition of Akorn.
On August 26, 2019, Akorn announced that it received a new Abbreviated New Drug Application approval from the FDA for Azelastine Hydrochloride Nasal Spray, 0.15%. The product is manufactured at Akorn’s Amityville, New York manufacturing facility. Azelastine Hydrochloride Nasal Spray, 0.15% is indicated for the relief of the symptoms of seasonal allergic rhinitis in patients 6 years of age and older and perennial allergic rhinitis in patients 6 years of age and older.
According to IQVIA, U.S. sales of Azelastine Hydrochloride Nasal Spray, 0.15% were approximately $18 million for the twelve months ended June 2019.
It’s possible that a larger player in the nasal spray industry wants to buy the company after the FDA approval. The company has a market cap of $458.7 million, but it did $662.9 million in sales last year for a hot P/S ratio of 0.69.
The predicted price target of AKRX stock after the Falling Wedge breakout is $3.97 – $4.89 as shown in the green shaded area on the chart above.
We are not adding AKRX stock to the long-term buy and hold GST Portfolio as it does not meet the stringent requirements for inclusion. Nevertheless, a short-term swing trade or position trade has set up in the stock that readers may be able to profit from.
Disclosure: We do not hold any position in AKRX stock.