Regulus Therapeutics (RGLS) Shares Soar 136.80% on Novartis Acquisition

Regulus Therapeutics (RGLS) shares surged by 136.80%, reaching their highest level since April 2016, with an intraday gain of 143.32%.

Regulus Therapeutics Inc. (RGLS) experienced a significant stock price increase, reaching a 52-week high of $2.91 on April 29, 2025. This high point was marked by substantial momentum, with the stock gaining 37% in the past week and 84% over six months. The impact of this new high on future price movements can be analyzed by examining the stock's performance over various short-term periods.
One Week After the High: The stock's recent surge in momentum suggests that it may continue to experience upward pressure in the short term. However, it's important to note that the Relative Strength Index (RSI) indicates overbought conditions. This could lead to a consolidation period where the stock may not experience significant gains but instead stabilize at the high point.
One Month After the High: Over the longer term, the stock's performance may be influenced by the acquisition agreement with Novartis, which could provide a floor for the stock price due to the guaranteed cash payment of $7.00 per share. Additionally, the contingent value right (CVR) offers an additional $7.00 per share contingent on regulatory milestones, which could provide further upside. Therefore, one month after the high, the stock may experience fluctuations but is likely to maintain a relatively high price level, potentially trending upwards as the CVR-related milestones are achieved.
Three Months After the High: At this point, the impact of the acquisition agreement should be more pronounced, and the stock may begin to reflect the full value of the Novartis deal. The average target price from analysts suggests significant upside potential, with an average one-year target price of $11.80, indicating a potential increase of 49.37% from the current price. This indicates that three months after the high, the stock could experience substantial growth as the market digests the acquisition and the CVR-related milestones are achieved.
In conclusion, while the stock may experience some consolidation in the immediate aftermath of reaching a new high, the overall trend is likely to be upward, driven by the acquisition agreement and the potential for future milestone payments. The stock's performance over the short term will be influenced by market sentiment and the timing of these events.

The significant stock price movement of Regulus Therapeutics is primarily driven by its acquisition agreement with Novartis AG. Novartis plans to acquire Regulus for $7.00 per share in cash, with a potential additional $7.00 per share through a contingent value right (CVR). This deal values Regulus at up to $1.7 billion and includes farabursen, an investigational microRNA inhibitor aimed at treating ADPKD, a genetic cause of renal failure. The merger is anticipated to close in the second half of 2025, subject to customary conditions, including shareholder approval and regulatory clearances.

Oppenheimer has downgraded Regulus from an Outperform to a Perform rating following the acquisition announcement. Additionally, legal firm Halper Sadeh LLC is investigating the fairness of the acquisition terms for Regulus shareholders, adding to the market's scrutiny of the deal.