Among the biggest moves in stock market news today include an 87% gain for organic food maker Annie's Inc. (NYSE: BNNY) in its first trading day, and a 55% jump for Amylin Pharmaceuticals (Nasdaq: AMLN).
Annie's Inc. (NYSE: BNNY) surges in first-day trading: It was expected to be among the best performers of the nine other companies going public this week – and it delivered.
The organic food producer ended its first trading day up 87%. The company offered 5 million shares at $19 a share.
"It's definitely the hottest deal of the week," Scott Sweet, senior managing partner at IPO Boutique, told Reuters. "They have only a few products but they've executed very well and have high brand awareness."
Known for its organic and gluten-free foods, Annie's hopes to capitalize on Americans' increasing trend toward healthy eating.
The growing popularity of more nutrition-conscious grocery shopping is illustrated in Whole Foods Market Inc. (Nasdaq: WFM) 844% share price rise in just over three years. Same-store sales at Whole Foods have steadily risen 8% over the past two years.
Annie's sales for the 2011 fiscal year that ended March 31 were $118 million, 23% higher than 2010. Profit increased 233% to $20.2 million from the year before.
Total sales for the U.S. organic food industry exceed $40 billion a year. Annie's wrote in its prospectus it estimates the industry will grow 8% a year through 2013.
Annie's macaroni and cheese products, crackers and fruit snacks outsell the competition at many grocery stores. To keep its leading market position, Annie's is developing new products to fight off growing competition from brands like Newman's Own and Nature's Path.
Annie's (BNNY) closed at $35.92.
Amylin Pharmaceuticals Inc. (Nasdaq: AMLN) soars on news "leak": After Bloomberg News reported Amylin Pharmaceuticals rejected a $3.5 billion takeover bid from Bristol Myers Squibb Co. (NYSE: BMY), its stock shot up 51%.
The Amylin board last month turned down Bristol Myers' offer of $22 a share, according to Bloomberg.
Investors bought in anticipating that a bigger deal is on the way – but analysts warned that today's run up is not necessarily a "Buy" signal.
"Although we have highlighted Amylin as one of our top takeout candidates given the reacquisition of global rights to exenatide, a franchise which could generate peak sales of $1.5 billion-plus, the upside in Amylin shares today in the backdrop of a stock that has significantly outperformed the group makes it prudent for fundamental investors to move to the sidelines," wrote Piper Jaffray analyst Ian Somaiya in a note to investors. "In the event of an acquisition, the stock is worth approximately $28-$37 per share."
Amylin closed up 55% at $23.77.
Amylin makes diabetes drugs Byetta and Bydureon. The diabetes sector is one of the fastest growing in the U.S. pharmaceutical industry due to rising rates of obesity among Americans. About 26 million Americans suffer from obesity.
Industry analysts have eyed Amylin as a takeover target for months. AstraZeneca plc (NYSE ADR: AZN) is rumored to be another possible Amylin buyer.
Bristol Myers "may not be the strongest bidder, given its weaker presence in the diabetes space in Europe and emerging markets," Joshua Schimmer, an analyst at Leerink Swann, told Reuters.
Schimmer believes the story was leaked to prevent to push Amylin toward a sale, not a partnership.
"We generally believe these stories are "leaks' that serve a purpose. In this case, the purpose of the announcement, we believe, is to tie Amylin's hands and prevent them from doing an ex-U.S. deal instead of a sale," said Schimmer. "At this valuation and with this information in the public domain, management will have a hard time justifying an extreme level of downside to shares, which would almost certainly come from an ex-U.S. partnership."
Amylin had a decade-long relationship with Eli Lilly & Co. (NYSE: LLY) that ended in November. That has triggered concern that Amylin won't be able to market the products on its own.
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Amylin rejected $3.5 billion Bristol offer: Bloomberg