The Year of the Biotech
9/21/2016
Thus far, 2016 has been the year of biotechnology stocks, which have been in the news for various reasons and most of them were good. There was a time when the knock on biotechnology was the fact that the vast majority of these companies didn’t make any money. This continues to be the case, but something interesting is happening that’s making that less relevant.
Case in point: Tobira Therapeutics (TBRA) saw its shares rocket on Tuesday by 550% on news that Allergan (AGN) is buying the company in a deal for $28.35 per share in cash, and it could become $49.84 per share upon reaching certain regulatory and commercial milestones. The company has two treatments in Phase II testing for non-alcoholic statohepatitis, which is the last chance to reverse damage to the liver before it becomes cirrhosis. I have talked about this epidemic in the past, and it is simply the result of Americans becoming fatter. So far this year, the three biggest winners in the market are all biotechnology stocks. By the same token, the top losers are also in the sector, including last week’s collapse of Novavax’s (NVAX) share price. On that note, I continue to think that Intercept Pharmaceuticals (ICPT) will one day see its shares up several hundred percent in a single session, but until that happens, it’s a high-risk idea. Click here to leave a comment.
Charles Payne
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