A $250M Buyout Offer and a +65% Soaring Stock--This Pharma Stock is on Cloud-9...

Theratechnologies woke up and chose violence yesterday. How? By doing absolutely nothing while Future Pak tried to buy their entire company with a fat stack of cash and a cherry on top. On Friday, THTX shares exploded 46% before lunch, ultimately closing the day up 65%. Bigly. The Michigan-based pharma packager Future Pak dropped a bombshell offer: $3.51 to $4.50 per share, all-cash, no financing. Which means that’s a 164% to 238% premium on Thursday’s close of $1.33. You can’t get much better than that at all. 

(Source: Giphy) 

Interesting, more details please…

In short, Future Pak is a privately held contract manufacturer. Not exactly a household name unless your household is a warehouse full of generic meds and vitamin bottles. But they’ve apparently been eyeing Theratech for quite some time now—as this is their third proposal since January. The problem, so far, is that Theratech’s board has been about as responsive as Diddy’s legal team. 

The new offer values the company at up to $255 million: $205 million in cash upfront, plus up to $50 million in CVRs (contingent value rights, aka “maybe money”). And unlike most pharma buyouts that come with a 50-slide deck full of financing contingencies and girthy synergy promises, this one is surprisingly clean. Future Pak says the deal is fully backed by Colbeck Capital, which if you’re not familiar, they're the kind of guys who don’t show up unless there's real money to be made.

(Source: StockTwits

Additionally the CVRS, aren’t just a throwaway carrot here. They're tied to gross profit from Theratech’s EGRIFTA franchise, which if you know what that is, screams “make it rain”. Basically, if EGRIFTA brings in more than $30 million a year in gross profit, Future Pak splits the excess 50/50 with shareholders for three years. And if gross profit hits $125 million cumulative in that window? Congratulations, a $10 million milestone bonus.

Now of course, it’s rare to see a microcap pharma get this kind of premium offer, especially from a private buyer going public with the bid. But it’s clear the Future Pak is trying to put Theratech’s board on blast with an offer they can’t refuse. Spoiler: shareholders f*ing loved it

(Source: Giphy) 

So with that, this kind of full-send usually means one of two things: either Future Pak sees real, scalable value in Theratech’s pipeline and wants to get in before someone else does, or they think management is asleep at the wheel and ripe for a hostile push. Probably both. Which means, Theratech’s board now has two options: play ball, or look like total clowns in front of their investors. Because again, you don’t get a clean, all-cash offer at 2.4x your market cap every day and say “I’d rather not.” Unless you’re actively trying to get replaced at the next shareholder meeting.

As of right now,there hasn’t been any official response from Theratech. But if they keep ghosting, expect activist investors to start sharpening their knives. This is the kind of offer that turns passive investors into bloodthirsty proxy warriors. Or, best case scenario, the board pulls its head out of its a$$, does some light due diligence, and locks in a definitive deal in the next four to six weeks, just like Future Pak suggested. Either way, Theratech stole the show by doing absolutely nothing yesterday, and it might be worth your attention next week. Until next time, friends… 

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Stocks.News does not hold positions in companies mentioned in the article.