Undervalued Inozyme Pharma (INZY) Amid Merger Scrutiny: A Catalyst for Upside?

The recent $4.00/share acquisition offer for Inozyme Pharma (NASDAQ: INZY) by BioMarin Pharmaceutical (NASDAQ: BMRN) has ignited a firestorm of legal scrutiny, shareholder activism, and market speculation. Despite the offer’s premium over Inozyme’s current trading price of $1.32, the stock remains deeply undervalued—a gap that could narrow rapidly as investigations into potential fiduciary duty breaches gain momentum. For investors, this is a rare opportunity to capitalize on a situation where legal catalysts, clinical upside, and valuation asymmetry are aligning to create a compelling short-term play.

The $4.00 Offer vs. Current Trading: A 67% Disparity Demands Explanation

The $4.00/share cash offer represents a 266% premium over Inozyme’s closing price of $1.13 on May 15, 2025—the day before the deal was announced. Yet, as of May 16, 2025, the stock trades at just $1.32, far below the tender price. This disconnect suggests investors are either unaware of the deal’s details or skeptical of its execution.

Why the Discount? Legal Investigations Could Be the Catalyst

Multiple law firms, including The Ademi Firm, Rigrodsky Law, and Halper Sadeh LLC, are investigating whether Inozyme’s board breached its fiduciary duty by:
1. Accepting an inadequate offer: The $4.00/share price is below the stock’s 52-week high of $6.24 and fails to reflect the value of its lead asset, INZ-701—a Phase 3 therapy for ENPP1 Deficiency, a rare and life-threatening genetic disorder.
2. Restrictive deal terms: The merger agreement includes a no-shop clause that limits Inozyme from seeking alternative bids, potentially suppressing shareholder value.
3. Insider benefits: Reports suggest board members and executives may receive preferential treatment under change-of-control provisions, raising questions about their alignment with common shareholders.

If these investigations succeed in compelling the board to renegotiate the deal or disclose hidden value, the stock could surge toward the $4.00 floor—or even higher.

INZ-701: A Late-Stage Catalyst Ignored by the Market

The legal scrutiny obscures Inozyme’s most compelling asset: INZ-701, an enzyme replacement therapy in Phase 3 trials for ENPP1 Deficiency. This ultra-orphan disease, affecting roughly 2,000 patients globally, has no approved treatments and causes severe skeletal abnormalities and cardiovascular risks.

Key milestones for INZ-701 include:
- Early 2026: Pivotal pediatric trial data expected.
- 2027: Potential FDA approval for pediatric patients.
- Expanded trials: Ongoing studies in infants and planned trials for adolescents/adults could broaden the addressable market.

Analysts project peak annual sales of $400–$600 million by the mid-2030s, a valuation not yet reflected in Inozyme’s stock. If the BioMarin deal collapses or the board is forced to seek a better offer, INZ-701’s potential could drive a bidding war.

Why Act Now? The Risk/Reward Is Overwhelmingly Positive

Investors who buy INZY at $1.32 are betting on two near-term catalysts:
1. Legal outcomes: If shareholder lawsuits succeed in blocking the merger or forcing a higher bid, the stock could jump to $4.00+ overnight.
2. Clinical data: Even if the merger proceeds, positive Phase 3 results for INZ-701 in early 2026 could revalue Inozyme’s pipeline, creating upside for BioMarin shareholders post-merger.

The risks are limited:
- If the merger closes as planned, investors pocket the $2.68 per share gain to $4.00.
- If the deal unravels, the stock could rebound toward its historical highs, especially if INZ-701’s value is unlocked.

Conclusion: A High-Conviction, Short-Term Opportunity

Inozyme Pharma is a textbook asymmetric bet: low cost, high upside, and a timeline measured in months, not years. With legal investigations intensifying and INZ-701’s Phase 3 data looming, the $1.32 price is a red flag—not a warning, but an invitation.

Action Item: Buy INZY at $1.32. Set a stop-loss below $1.00 and target $4.00+ within 6–12 months. This is a rare chance to profit from both legal catalysts and a groundbreaking therapy’s potential.

Investors should consult with a financial advisor before making any investment decisions. Past performance does not guarantee future results.