What A Difference A Week Makes For Biotech Stocks

Last week the biotech sector seemed in freewill. Bristol Myers Squibb (BMY) had made a deal to buy Celgene (CELGWealth Strength IndexCELG is Extremely Down and trending Down) at a whopping 54% premium to Wednesday’s close and the sector dropped on the news. The prevailing theory was that the deal removed one hungry big drug company from the market for an acquisition in the sector. The bidding pool, in other words, had just gotten significantly smaller.

This week, however, the thinking seems to be that the deal–and the size of the premium–validates the attractiveness of biotech acquisitions.  That shift in thinking–and presentations at the JPMorgan Healthcare Conference–has sent the sector flying again today after a very solid Monday. (It certainly didn’t hurt that on Monday, January 7, Eli Lilly (LLY) announced that it would acquire Loxo Oncology, an oncology biotech, for $8 billion and a 68% premium.)

Biotech stocks in my various portfolios moved up: Intrexon (XON) closed ahead 0.93%; Ionis Pharmaceuticals (IONS) finished up 0.69%; Incyte (INCYWealth Strength IndexINCY is Moderately Flat and trending Down) ended the day higher by 0.93%; and Nektar Therapeutics (NKTR) roared upwards by 11.09%.

As you might imagine from those performance numbers, Nektar had the most to report at today’s session of the JPMorgan conference. The company presented a list of expected 2019 milestones:

Initiation of new Bristol Myers/Nektar registrational trials in renal cell carcinoma, bladder cancer, non-small cell lung cancer, breast cancer, gastric cancer, colorectal cancer, small cell lung cancer and sarcoma Presentation of data from PIVOT study of NKTR-214+nivo in patients with bladder cancer Presentation of data from Phase 1 dose-escalation phase of REVEAL study of NKTR-214 plus NKTR-262 Potential approval and launch of NKTR-181, the company’s non-addictive opioid painkiller Data from first-in-human Phase 1 single-ascending dose clinical trial of NKTR-358 PIVOT data presentations in lung cancer (ESMO) as well as other tumor types Eli Lilly to initiate two new Phase 1b studies of NKTR-358 in two new auto-immune conditions