+ 2.69
+ 1.88%

Is Big Pharma Hinting At A SMID-Cap Biotech Rally?

February 3, 2016 1:16 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

UBS analyst Andrew Peters believes investors may be missing a strong bullish sign in the biotech sector this earnings season. According to Peters, the pullback in biotech stocks in recent months has made many smaller names compelling buyout targets, and big pharma earnings commentary seems to suggest that some major deals could be coming soon.

“This sentiment was put most bluntly by Gilead, suggesting that ‘there’s no question’ that the recent pullback in smid valuation has made M&A more attractive,” Peters noted in a new report. He added that the biggest risk to many potential deals could be the target companies' unwillingness to accept terms at such depressed valuations.

Related Link: How Much Is Time Warner Worth In A Break Up?

Although the report didn’t mention specific buyout targets by name, in included a list of big pharma companies that recently discussed the potential for M&A deals in the near future, including Gilead Sciences, Inc. (NASDAQ: GILD), Pfizer Inc. (NYSE: PFE), AbbVie Inc (NYSE: ABBV) and Bristol-Myers Squibb Co (NYSE: BMY).

Disclosure: The author holds no position in the stocks mentioned.

Image Credit: Public Domain

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.

Related Articles

UBS Downgrades AbbVie; Here's What Changed Analysts' View

Gilead Analysts Trim Expectations After 'Very Unexpected' Adverse FDA Ruling

Gilead Sciences, Inc. read more

Moderna Short Sellers Take $450M Hit Following Coronavirus Vaccine Data

Biotech stocks are often high-risk, high-reward investments that have binary outcomes based on one or a handful of drug or device candidates in development. Shorting these types of stocks can be very risky due to the potential for unexpected positive testing data, regulatory approvals and buyouts. read more

5 ASCO Abstracts Moving Biopharma Stocks

The American Society of Clinical Oncology annual conference brings together oncology professionals, patient advocates, industry representatives, and major media outlets from across the globe. This year's meeting is is scheduled for May 29-31 and is organized as a virtual event due to the lockdowns and stay-at-home restrictions necessitated by the COVID-19 pandemic. read more