Those who were hoping that biotech stock F-Star Therapeutics (NASDAQ:FSTX) might end up sold to a Chinese company have likely had their hopes dashed. F-Star closed down over 26% in Thursday’s trading after seeing shares drop as much as 45%.
The massive plunge followed reports that F-Star wasn’t likely to pass muster with regulators on its planned sale to Sino Biopharmaceutical, or rather, to invoX Pharma, the part of Sino Biopharmaceutical that was planning the purchase. The merger was planned to take place on January 31. However, with that date now just a few days off and little sign of agreement to come from regulators, the odds of a completed deal sink with each passing day.
Indeed, it doesn’t look good at all. In the closing days of 2022, the Committee on Foreign Investment put out an “interim order” that blocked the sale altogether. Thus, the intended $161 million deal—and in all cash, no less—was largely scuttled before it got out of the gate. Worst of all, the reason the Committee is holding things up is connected to “national security issues,” reports note.
The last five days of trading demonstrate just how much power this one piece of bad news had. The stock largely plateaued, hovering along the $5.90 mark. There was barely a dime’s worth of fluctuation one way or the other. Then the news hit about the sale, and a near straight-line drop followed. The stock rallied throughout the course of the day. However, it’s still well off its highs of just two days ago.
