Why Is Flexion Therapeutics’ Share Price Up Over 50% This Week?

A major buy-out has sent prices soaring for one of the global leaders in non-opioid pain management, but should you consider investing?

Oct. 13, 2021

Flexion Therapeutics (NASDAQ: FLXN) is a U.S. biopharmaceutical company focusing on the management of musculoskeletal pain. Its flagship product, Zilretta, is an industry-leading FDA-approved treatment for osteoarthritic knee pain. Currently, it’s the only approved treatment that uses extended-release microsphere technology. This radical form of pain relief injection allows for longer-lasting positive effects, with reduced pain lasting for up to 16 weeks in some cases.

Flexion shares have shot up by over 50% in recent days, but is it a good time to invest?

Why is Flexion Therapeutics Stock Up?

On Monday, October 11, an acquisition of Flexion Therapeutics by Tampa-based health-solutions giant Pacira BioSciences Inc. was announced. Pacira has committed to buying every issued and outstanding share at a price of $8.50 each. A contingent value right (CVR) worth up to $8 a share will also be payable if Flexion achieves certain goals regarding sales and FDA product approval by the end of the year. This buy-out has stoked investor interest as it shows real confidence in the potential value of Flexion’s pain management products. 

Should I buy Flexion Therapeutics Stock?

Despite soaring prices and predictions for an improved market for elective surgeries through the end of the year, it might not be time to buy just yet. An investigation into the legalities of the proposed acquisition has been initiated by renowned shareholder rights law firm Johnson Fistel, LLP. Serious questions are being asked about whether or not the Flexion board satisfied its duties to their existing shareholders. If any of the concerns being investigated are found to be true, it could be devastating to the stock price or even to the proposed buy-out itself.

However, if the investigation turns up nothing, Flexion could be a stock in line for continued growth as it seeks further FDA approval for treatments aimed at reducing musculoskeletal pain. This, paired with the continued expansion of Zilretta as a flagship product, could make Flexion a solid long-term investment.

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