Plasmatech Biopharmaceuticals Inc (NASDAQ:PTBI), a biopharmaceutical company, ended the session a huge 44% higher but registered the day high at $11.15, 86% higher than the previous day’s closing price. It opened with a big gap and reached the day high within the first two hours but a bout of profit booking in the latter hours pushed the price a bit lower. The stock gained nearly 200% in the last two sessions with the volume reaching 65 million on each day against the daily average of 6 million only.
The huge jump came on the back of Plasmatech Biopharmaceuticals Inc (NASDAQ:PTBI) announcing a definite agreement to acquire Abeona Therapeutics, a company that develops and commercializes therapies for patients with lysosomal storage diseases. The market has received the announcement with a lot of excitement. Upon closing of the transaction, Abeona Therapeutic members will be issued a total of 3,979,761 common shares by Plasmatech Biopharmaceuticals Inc (NASDAQ:PTBI), coupled with performance milestones up to an additional $9 million, in common stock or cash, depending on the company’s choice.
The deal has been unanimously approved by the board of directors of Plasmatech Biopharmaceuticals Inc (NASDAQ:PTBI) and the managers of Abeona. It is expected that the transaction will be closed by the end of 2015, subject to customary closing conditions.
The main business of Plasmatech Biopharmaceuticals Inc (NASDAQ:PTBI) is the development of protein biologic therapies and oncology supportive care products and the product basket also includes the administration of oral mucositis in MuGard and treatment of radiation proctitis in Proctigard.
Technically, the stock has hit a strong supply area around $11 and extending the rally anymore in the short term looks difficult. Investors could do better to book profits or at least keep a tight protective stop loss. The event based rally makes any recommendation of fresh investment at this point very unlikely.
