Stockwatch: Big Pharma Buys Bargain-Basement Big Biotech
AstraZeneca’s Acquisition Of Alexion May Not Be The Last
The acquisitions of Alexion and Celgene are the latest in a long line of transactions in which big pharma buys big biotech. But these latest two are of biotechs that have disappointed their investors, and there are still some of those left for 2021.
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Bristol's surprising purchase diversifies its portfolio beyond Opdivo, while stopping Celgene's ongoing stock price declines after several setbacks. While Bristol execs downplayed the mid-term risk of generics for Celgene's blockbuster Revlimid, they highlighted near- and long-term growth drivers.
Biotech has always been a volatile sector, and it is important for investors to recognize the phases its stocks go through. In particular, the journey through the post-bubble wilderness can be a protracted affair.
Medicare price renegotiation and the FTC’s scrutiny of biopharma acquisitions have suppressed sector stock prices. But the sector may not be the actual target.