Biotech Stock Poised For Big Gain Or Big Fall
One Wall Street analyst says there's no middle ground forward for investment in biotech firms, whose products are becoming the focus of scrutiny after big price hikes. Elsewhere, a new multiple sclerosis drug from Roche shows promise, and there's news on a takeover bid by Blackstone and an impending sale by Clayton, Dubilier & Rice of a drug-compounding firm.
The Wall Street Journal:
Biotechs Are A ‘Strong Buy’ Or ‘Strong Sell,’ Wall Street Strategist Says
Biotechnology stocks can’t catch a break. And one Wall Street strategist says the volatile price action recently has him expecting one of two things: A sharp turnaround or a deeper plunge. “The group isn’t a ‘Buy’ or ‘Sell’ here – it is either ‘Strong Buy’ or ‘Strong Sell,’” wrote Nicholas Colas, chief market strategist at brokerage Convergex. Biotechs have long been a volatile sector, well outperforming the large-cap S&P index during good times and significantly underperforming during bad times. (Scholer, 10/8)
The Wall Street Journal:
Roche’s MS Drug Reports Promising Results
Roche Holding AG’s Genentech unit said its experimental drug ocrelizumab proved effective in three late-stage studies against multiple sclerosis, potentially heralding an important new treatment option for the debilitating disease. In two of the studies, which included 1,656 patients with relapsing multiple sclerosis, the most common form of the condition, ocrelizumab proved superior to the commonly used drug, Rebif, in reducing the annual rate of relapse of major symptoms and other measures of the status of the disease, Roche said. (Winslow, 10/8)
Bloomberg:
Blackstone To Acquire BioMed Realty Trust For $4.8B
Blackstone Group agreed to buy landlord BioMed Realty Trust Inc. for $4.8 billion, betting on growth in real estate demand from the life sciences and biotechnology industries. Shares of REITs have been battered this year as investors gird for the first interest-rate hike since 2006, creating opportunities for buyers like New York-based Blackstone to acquire companies relatively cheaply. Health-care spending is rising quickly in the United States, boosting demand for laboratory space that can accommodate pharmaceutical developers and manufacturers. (Callanan and Mulholland, 10/8)
The Wall Street Journal:
PharMEDium A Hit For CD&R As Firms Renew Interest In Sector
Clayton Dubilier & Rice’s planned sale of drug-compounding company PharMEDium Healthcare Holdings Inc. for $2.58 billion stands to land the private equity firm a nice return on its investment. It also reflects revived interest in compounding pharmacies, which mix or dilute pharmaceutical agents to create hospital-grade dosage forms that aren’t commercially available. (Or, 10/8)
