Why Radius Health Climbed Today

Shares of Radius Health (NASDAQ: RDUS) were up by more than 14.6% as of 12:28 p.m. on Thursday on news that the company has agreed to be acquired by a pair of private healthcare investment companies. The deal to take the business private is valued at $890 million, a sum to be split between cash that will be paid to shareholders up front and cash to be paid later, contingent on one of Radius' osteoporosis medicines, Tymlos, reaching $300 million in net sales during a 12-month period between now and the end of 2025.

Shareholders will get $10 for each of their Radius shares when the transaction closes, and an additional $1 per share if sales of Tymlos clear the target.

The stock's price rose to reflect the up-front payout, but its current level near $10.20 indicates that there is a perceived risk that sales of Tymlos may fall short of the level required to trigger the additional payment.

Source Fool.com