Will Dimension Therapeutics Take the New and Bigger Buyout Offer?

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Dimension Therapeutics Inc. (NASDAQ: DMTX) saw one of the largest gains on the day after it came to light that the company received an acquisition offering from Ultragenyx Pharmaceutical Inc. (NASDAQ: RARE). Although this offer is sizable, Dimension already has entertained an offer, so this could spark a bidding war.

Dimension had announced a definitive agreement with RegenXbio Inc. (NASDAQ: RGNX) to be acquired in late August.

Under the terms of the RegenXbio deal, it will acquire Dimension in an all-stock transaction for an implied value of approximately $3.41 per share. This implies upside of 184% from the August 24, 2017, closing price of $1.20.

Ultragenyx is valuing Dimension at $5.50 per share, or roughly $138 million. This implies a premium of 31% from the most recent closing price of $4.20. However this is a premium of 358% from the August 24 price.

Dimension has yet to issue a response to Ultragenyx, but investors have to be happy with this turn of events.

Emil D. Kakkis, M.D., Ph.D., CEO and president of Ultragenyx, commented:

This transaction provides a compelling opportunity to create value by leveraging Ultragenyx’s advanced clinical and regulatory expertise, as well as its rare metabolic disease commercial infrastructure to advance Dimension’s rare disease focused gene therapies and bring much needed new treatments to market. Based on my own experience as a scientific advisor to Dimension, I have the greatest respect for the deep expertise and knowledge of Dimension’s employees in AAV gene therapy and manufacturing.  We share Dimension’s vision for bringing transformational new therapies to patients with rare genetic diseases and believe that bringing our two companies together would accelerate the process of bringing important new therapies to market for patients.

Shares of Dimension were last seen up 35% at $5.68, with a consensus analyst price target of $4.78 and a 52-week range of $1.05 to $9.98.

Ultragenyx shares were trading down 1.5% at $54.41. The stock has a 52-week range of $49.56 to $91.35 and a consensus price target of $68.63.

RegenXbio was trading up 4.6% at $29.55 a share, in a 52-week range of $13.61 to $30.25. The consensus price target is $43.00.