Why Akero Therapeutics Stock Trounced the Market on Thursday

One of the best catalysts for sudden, sharp rise in the price of a stock is when the company behind it get acquired at a premium. Case in point: Akero Therapeutics (NASDAQ: AKRO), whose shares soared by more than 16% Thursday after it was revealed the biotech will have a new owner. That pop was especially impressive, given that the bellwether S&P 500 (SNPINDEX: ^GSPC) slumped by 0.3% on the day.

A potentially $5 billion-plus deal

Akero's buyer is none other than Novo Nordisk, the Denmark-based pharmaceutical company behind star weight loss drug Wegovy.

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In separate press releases, Novo Nordisk and Akero wrote that they have signed a definitive agreement for the former to purchase the latter in an all-cash deal. Akero stockholders are to receive $54 per share in cash, plus a nontransferable contingent value right (CVR).

One CVR will grant the holder an additional $6 per-share contingent -- hence the name -- on Akero's investigational efruxifermin drug, obtaining U.S. Food and Drug Administration (FDA) approval by June 30, 2031. The drug targets a stage of cirrhosis arising from the liver disease metabolic dysfunction-associated steatohepatitis (MASH).

All told, the deal will be worth as much as $5.2 billion. It has been unanimously approved by Akero's boards of directors, and is expected to close around New Year's.

Possible portfolio enhancer

In its press release on the buyout, Novo Nordisk quoted chief scientific officer Martin Lange as saying that it "complements Novo Nordisk's leading portfolio and is aligned with our commitment to building a competitive portfolio of treatment options across the stages of MASH."

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.