NEW YORK (AP) — Shares of Cubist Pharmaceuticals Inc. rose on speculation the company may be acquired by Irish drugmaker Shire PLC.
THE SPARK: The Daily Telegraph of London first linked Shire to Cubist on Monday. Speculation about a $2 billion deal appeared to gain steam after a Shire executive resigned from Cubist's board of directors. After the market closed on Wednesday, Cubist disclosed that Dr. Sylvie Gregoire resigned from its board. Gregoire is Shire's president of human genetic therapies, and she has sat on the Cubist board since 2006. Her current term on the board was scheduled to expire in 2013. Cubist said Gregoire resigned May 19.
A Cubist Pharmaceuticals spokesman the company would not comment on market speculation. He said Gregoire resigned because she plans to move to Europe.
THE BIG PICTURE: Shire makes several treatments for attention deficit hyperactivity disorder, including Adderall XR. Cubist's only approved product is Cubicin, which is used to treat severe skin and bloodstream infections. The company is based in Lexington, Mass.
On May 17, Shire agreed to buy Advanced BioHealing Inc. for $750 million.
SHARE ACTION: Cubist shares rose $1.60, or 4.4 percent, to $38.36 in afternoon trading. The stock reached an annual high of $39.29 earlier in the day. Shire stock gained 11 cents to $91.54.