Specialty biopharmaceutical company Biodel Inc (NASDAQ:BIOD) shot up 12% on Friday, closing at $0.56 with 1.44 million shares changing hands.
The company focuses on developing and bringing to market treatments for diabetes that seek to be more effective, safe and convenient compared to existing drugs.
Shares of Biodel have been on an uptrend since late June 2016, when they touched a low of $0.26.
Biodel Inc (NASDAQ:BIOD) breaks out of ascending triangle
On October 4, Biodel broke out of an ascending triangle pattern with higher than normal volume rising to a high of $0.59. However, bears were able to drag down the price on October 6 back to $0.50. Friday’s move shows that bulls have nullified that by pulling up the price back to $0.56.
As a result, Biodel has now established itself above the 200-day SMA, indicating it may be going higher in the long term.
The weekly chart shows that a basing saucer pattern has been formed over the past year, and the stock may now be breaking above the cusp of the saucer, having closed on Friday above the May 2016 high of $0.53.
Biodel Inc (NASDAQ:BIOD) to combine with Albireo Limited
In May, Biodel announced its proposed combination with Albireo Limited, a privately held bio-pharma company having locations in Sweden and Boston.
Albireo is developing its Phase 2 lead drug A4250 to treat Progressive Familial Intrahepatic Cholestasis (PFIC), an orphan pediatric liver disease with no approved drug treatment.
Albireo also is developing elobixibat, a treatment for chronic constipation undergoing trials in Japan through licensee EA Pharma Co., Ltd.
Last week, Albireo announced that in a pivotal Phase 3 trial of elobixibat, the drug met the primary endpoint, change in the number of weekly spontaneous bowel movements from baseline to the first treatment week compared with placebo, with high statistical significance.
“Albireo expects that EA Pharma will file a new drug application for elobixibat in Japan in the first quarter of 2017 and make a milestone payment to Elobix AB, Albireo’s indirect wholly owned subsidiary, later in 2016 under the terms of the parties’ license agreement,” the company said.
Biodel Inc (NASDAQ:BIOD)’s share exchange agreement with Albireo Limited could be very lucrative
The aforesaid transaction between Biodel and Albireo is expected to be consummated in the fourth quarter of 2016. On completion, the combined entity will call itself Albireo Pharma, Inc, trading on the NASDAQ under the ticker ALBO.
Pursuant to the share exchange Biodel stockholders are expected to own approximately 33%, and Albireo stockholders are expected to own approximately 67%, of the combined company.
More important, prominent investors such as Phase4 Ventures, TPG Biotech, TVM Capital Life Science and AstraZeneca will invest an additional $10 million prior to the closure of the transaction.
According to Gary Gemignani, Chief Executive Officer of Biodel, stockholders will gain a significant equity stake in a biopharmaceutical company with promising clinical assets and substantial upside opportunity.