Gilead grew into a $100 billion biotech company by selling treatments for HIV/AIDS and hepatitis C. Food and Drug Administration, and the FDA's target action date is November 29, with European approval set for next year. The Axi-cel treatment is currently under review by the U.S. The company expects axi-cel to be approved as a treatment to fight aggressive non-Hodgkin lymphoma. Kite's biggest, most advanced offering is a CAR T therapy called axicabtagene ciloleucel, or axi-cel. We are greatly impressed with the Kite team and what they have accomplished, and share their belief that cell therapy will be the cornerstone of treating cancer." "The field of cell therapy has advanced very quickly, to the point where the science and technology have opened a clear path toward a potential cure for patients. "The acquisition of Kite establishes Gilead as a leader in cellular therapy and provides a foundation from which to drive continued innovation for people with advanced cancers," Gilead President and CEO John F. However, the Kite acquisition won't become neutral in terms of earnings until the third year of the deal, according to Gilead. Gilead made it clear in its official announcement that the Kite purchase is designed to diversify its drug offerings.
Shares of Kite reached a new all-time high on Monday, and the company's shares have already traded hands more than eight times its average volume. Kite and Gilead's board of directors both unanimously approved the deal, which will reportedly close in the fourth quarter. Click here to learn more.Gilead's $180 a share purchase marks a 29% premium from Kite's Friday close. In it, growth investing expert Mike Cintolo recommends 10 of the market’s hottest stocks every Monday, with a goal of delivering fast profits in a short amount of time. Now, if you think you need a little help identifying which biotech stocks have the best charts, I’d suggest subscribing to our Cabot Top Ten Trader investment advisory. Combine the reasonable values, momentum derived from the Gilead-Kite Pharma deal and technical strength, and biotech stocks suddenly look like the best place to invest your growth investing dollars. And in a market in which sector rotation has been prevalent of late, biotechs are the latest sector to attract a wave of buyers. Look at the forward P/E ratios among the four largest companies in the sector by market cap, including Gilead:įor a sector that’s known for high valuations, those look like bargain stocks-at least on the surface. On a price-to-earnings basis, many biotechs are still cheap. For all its recent gains, the IBB still trades 21% below its all-time highs around 400 set two summers ago. With momentum on its side and technical barriers coming down, a sustained run could be in store for biotech stocks. And it’s now trading well above both its 25- and 50-day moving averages. From a technical standpoint, the IBB has already broken out, hitting a 52-week high. But one really good week could be enough to push biotech stocks into a more long-lasting rally. Going forward, biotechs can only get so much traction out of a single deal in the sector, however big or meaningful it is. For a biotech sector desperate for good news, it added up to the perfect storm for biotech stocks. It coincided with this week’s run-up in the market as a whole.
By buying out KITE and its $32 million in annual revenue (and $10.2 billion market cap), Gilead became that much bigger.Īnother reason was simply the timing of the deal. With a $109 billion market cap (and climbing) and $28.5 billion in revenues over the last 12 months, GILD already had outsize influence on the biotech sector. So it’s clear that the Gilead-Kite Pharma deal has acted as a sort of wakeup call for the entire sector.
Prior to that breakout, biotech stocks had been on a month-long decline, and had gone nowhere since a big jump in the first three weeks of June. Since the mega deal was struck on Monday, the iShares Nasdaq Biotech ETF (IBB) is up 5.6% as of this writing, compared to a 2.3% run-up in the Nasdaq. But it seems the ripple effect of the Gilead-Kite Pharma deal have spread to the entire biotech sector. Gilead Sciences (GILD) bought out Kite Pharma (KITE) for $11.9 billion this week, prompting huge gaps up in both biotech stocks.
0 kommentar(er)
