Less than three weeks since its stock doubled in price after strong financial results, Medicure Inc. shares have again lit up.
This time, it could be speculation about some kind of transaction the small pharmaceutical company might be involved in.
On Monday, the company announced it has entered into an arrangement with Knight Therapeutics Inc., a Montreal company that recently completed a multi-billion-dollar sale that netted its investors huge returns.
Medicure shares closed Tuesday at $2.79, a whopping 790 per cent higher than its closing price on March 26.
The company issued a statement on Tuesday in response to the heavy trading and price spike that said in part, "The company is currently pursuing one specific opportunity, under which the company would be a party to an acquisition. There is no assurance that this potential transaction, or any other transaction, is going to be completed."
Knight Therapeutics and its arrangement to provide advisory services to help advance Medicure's U.S. specialty pharmaceutical business might have excited Medicure investors.
Medicure president Dawson Reimer said the market had not priced in a beneficial financial restructuring in 2011 and recent regulatory changes to the dosage labelling for Medicure's heart drug, Aggrastat. The Winnipeg company has the rights to sell Aggrastat in the U.S. and posted very strong sales growth in its most recent financial results.
Reimer said the company has indicated it has been pursuing a potential transaction for some time and cautioned there is no guarantee it will materialize into anything.
-- Martin Cash