Sunovion Pharmaceuticals Inc, a unit of Japan's Dainippon Sumitomo Pharma Co Ltd, said it would buy Canada's Cynapsus Therapeutics Inc for about $624 million.

The price of the Canadian drugmaker's US-listed shares hit $40 in extended trading on Wednesday, more than double the closing price of $18.36. The announced purchase price of $40.50 per share in cash was a 120.5 per cent premium over that closing price.

Through the deal, Sunovion will acquire Cynapsus’ drug candidate, APL-130277, which is currently in its phase three clinical trial stage. It is designed to be an easy to administer, sublingual thin film of apomorphine to manage OFF episodes associated with Parkinson’s disease (PD).

People with Parkinson's disease suffer from motor fluctuations which oscillate between "off" times, a state of decreased mobility, and "on" times, or periods when the medication is working and symptoms are controlled.

The deal, which is expected to close in the fourth quarter, "reflects Sunovion's global strategy to expand and diversify its portfolio in key therapeutic areas, including neurology," Sunovion said.

BofA Merrill Lynch serves as financial advisor, and Borden Ladner Gervais and Troutman Sanders serve as legal advisors to Cynapsus. Nomura Securities International, Inc. serves as exclusive financial advisor, and Goodmans, Reed Smith, and Gibbons PC serve as legal advisors to Sunovion. - Reuters