Biotechnology stocks, as measured by the iShares Nasdaq Biotechnology ETF, broke out to an eight-year high as a blossoming drug pipeline sparks buyout interest and signals the maturing of an industry that many investors had written off as un-investable for the larger part of the last decade.
“People haven’t expected this breakout because of that ‘biotech’ label, which carries an investing stigma,” said Guy Adami, managing director for Drakon Capital and a ‘Fast Money’ trader. “Companies like Celgene are real stories with monster pipelines.”
The biotech sector hit this milestone following a takeover of Facet Biotech and a FDA panel win by InterMune after the bell Tuesday night. Abbot Laboratories bought Facet, a maker of cancer and multiple sclerosis drugs, for $27 a share, or a premium of more than 60 percent. InterMune shares surged more than 60 percent after an FDA advisory panel gave the green light to the company’s experimental drug that treats lung scarring. Earlier this month, Japan’s Astellas Pharma launched a $3.5 billion hostile bid for OSI Pharmaceuticals, targeting its cancer drug Tarceva.Page 1 of 8 | Next Page