Idera Pharmaceuticals Inc. (NASDAQ:IDRA) is under investigation by Levi & Korsinsky, LLP, an established firm in securities litigation.
What happened?
Earlier in the day, it was announced that Idera Pharmaceuticals would be merging with BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) to form a brand new company, under a new name, that will focus on developing and commercializing medicines for rare diseases. The merger is expected to be completed by the end of the second quarter of this year.
In the merger, BioCryst shareholders will be receiving 0.5 shares of the new company’s stock and Idera shareholders will be receiving 0.2 shares of the new company’s stock. This will result in BioCryst shareholders owning 51.6% of the merged company and Idera shareholders owning 48.4%.
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In the announcement, this share breakdown was said to be calculated based on the approximate 30-day average volume weighted trading prices of each company. However, considering the investigation, somebody seems to believe that the transaction isn’t fair.
Levi & Korsinsky, LLP are investigating whether the Board of Idera has breached their fiduciary duties to stockholders, providing an unfair advantage to BioCryst stockholders. The investigation will also be looking into whether BioCryst is underpaying for Idera shares.
What happened on the market?
Idera Pharmaceuticals stock has taken a hit. At the time of writing, Idera stock is trading at $2.005, which puts it down $0.545, or 21.373%, from the previous closing price of $2.405. The day’s trading has ranged from a low of $1.84 and a high of $2.40.
BioCryst Pharmaceuticals stock has also gone down, although not by as much. The stock is currently trading at $5.125, which puts it down $0.465, or 8.318%, from the previous closing price of $5.59. The day’s range has gone between $4.93 and $5.795.
Both Idera and BioCryst stock was relatively stable throughout the last five days of trading, and so it wasn’t until today that the stocks became rocky. The overall reaction by investors to the companies merging seemed negative from the start. Idera stock, in particular, began to decline before the news even broke of the investigation.
What do you think? Will the investigation turn up anything? Or is it all just part of the standard procedure?
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Featured Image: Medgadget
