Shares of cancer treatment companies rose on Monday after Pfizer Inc. announced its intention to acquire drug maker Array BioPharma Inc. in a transaction worth up to $ 11.4 billion. dollars.
Shares of Incyte Corp.
INCY, + 5.35%
rose 5.3% Monday afternoon, while the shares of Iovance Biotherapeutics Inc.
IOVA, + 14.53%
up 13% and shares of Turning Point Therapeutics Inc.
TPTX, + 10.83%
jumped 12.6%. Shares of Blueprint Medicines Corp.
BPMC, + 5.20%
increased about 6% and Mirati Therapeutics Inc.
MRTX, + 7.13%
shares gained 5.4%, while SPDR S & P Biotech ETF
XBI, + 4.79%
Jared Holz, strategist of Jefferies, head of trading in the healthcare sector, told MarketWatch in an email that the amount paid by Pfizer – $ 48 per share, a premium of almost 13% over the course Monday's action – suggests potential acquisition targets. The anticipation around mergers and acquisitions should continue to boost the course of action of some cancer treatment companies, he said.
More on Pfizer and Array: S & P CreditWatch Negative for Balance Sheet after $ 11.4 Billion Deal with Array and Array BioPharma Shares After $ 11.4 Billion With Pfizer
PFE, + 0.08%
is looking to expand its portfolio of cancer drugs with this acquisition. Board
ARRY, + 56.47%
The portfolio includes Braftovi and Mektovi, whose combined use has been approved in the treatment of some advanced metastatic melanoma. The combination therapy has significant potential for long-term growth, said Pfizer, and is currently being tested in more than 30 clinical trials for the treatment of several other cancers, including metastatic colon cancer.
Moody's said in a report last week that several biopharmaceutical giants, particularly Amgen Inc.
AMGN, + 1.14%
BIIB, + 1.79%
BROWN, + 1.21%
and Novo Nordisk A / S
NVO, + 0.36%
– had a "very high" M & A capacity, thanks to generous cash reserves and what the agency called moderate debt ratios. The rating agency has announced that it predicts an increase in mergers and acquisitions, particularly in the areas of oncology and gene therapy, as recent decisions such as Pfizer's announcement on Monday of Eli Lilly & Co.
THERE IS, + 1.02%
acquisition of Loxo Oncology and the acquisition of Nightstar Therapeutics by Biogen. Merck & Co.
MRK, + 0.48%
announced last week its intention to buy Tilos Therapeutics, a biotech for the treatment of cancer.
Related: Opinion: These 6 biotechnology stocks are promising acquisition targets
More on biotechnology: IPO of Adaptive Biotechnology: Five Things to Know