Roche buys Spark Therapeutics and Investors Digest Berkshire's annual letter – The Fool Motley

Inventories rose on the rise at the news that an increase in tariffs on Chinese products would be delayed but would have declined during the session. the Dow Jones Industrial Average (DJINDICES: ^ DJI) and the S & P 500 (SNPINDEX: ^ GSPC) both posted modest gains.

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Biotech's shares jumped following the announcement of some big contracts, with the SPDR S & P Biotech ETF (NYSEMKT: XBI) soaring 4.4%. Gold stocks fell; the ETF VanEck Vectors Gold Miners (NYSEMKT: GDX) decreased by 1.3%.

As for individual stocks, Roche Holdings (NASDAQOTH: RHHBY) announced that he is buying Therapeutic Spark (NASDAQ: ONCE), and Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) published its annual shareholder letter over the weekend.

Roche pays for gene therapy

Shares of Spark Therapeutics gene therapy specialist catapulted 120.1% to $ 113.48 after the Swiss pharmaceutical giant Roche Holdings announced that it would buy the company at $ 114.50 per share as part of of a fully cash transaction worth $ 4.3 billion. The price represents a premium of 122% over Friday's closing price and 19% above Spark's record high of $ 96.59 last July.

Spark specializes in gene therapies for genetic diseases. She was the first company to receive FDA approval for such treatment in 2017, when Luxturna was approved as a punctual treatment for a rare disease that causes blindness. Roche's biggest prize in the short term, however, is Spark's gene therapy for hemophilia A and hemophilia B, which is currently undergoing late-stage clinical trials. These assets will complement Roche's current entry into the hemophilia market, Hemlibra.

The transaction still needs to be approved by Spark shareholders and regulatory authorities, but Roche, which acquired a genetic testing company last year and the pioneer of Genentech Biotechnology a decade ago, said it was not enough. expects the transaction to be finalized in the second quarter.

Berkshire Hathaway saves higher operating profit

A highly anticipated event by the investment community is the publication of Berkshire Hathaway's annual letter to shareholders, written by Warren Buffett himself. The 2018 edition reported a significant operating income gain and a change in the way the company will report its results. The title finished up 0.2%.

Berkshire announced a loss of $ 25.4 billion, but this is due to the fact that, in accordance with accounting rules, the company must report in the income statement the paper losses resulting from the value of the publicly traded shares of its portfolio . Buffet encourages shareholders to focus on operating profit, which stood at $ 24.8 billion for the year, 41% more than the previous record reached in 2016.

Buffett said the company would abandon its long tradition of book value accounting as Berkshire will be "a significant buyer" of its own shares over time, resulting in a gap between the measurement criterion and the intrinsic value of the society.

For the future, Buffett said the prices of companies offering good long-term prospects were "exorbitant," meaning that Berkshire would likely continue to grow its holdings of marketable securities, rather than buy back businesses.

Jim Crumly owns shares of Berkshire Hathaway (B shares). The Motley Fool owns shares and recommends Berkshire Hathaway (B shares). Motley Fool has a disclosure policy.