Veteran biotech analyst John McCamant, who is also editor of the Medical Technology Stock Letter, in Berkeley, California recently stated, “Biotech stocks are still in favor with investors for all the right reasons: constant M&A, solid clinical data, regulatory reviews, upcoming scientific conferences, selective stock picking, and technical support.”
Curiosity has continues to circle the biotechnology industry as speculation on a “bubble bursting” has yet to be proven true. Companies within the space continue to see increased market volume, additional price increases, and breaking news which has sparked a continued interest in the space. About a month ago iBio, Inc (IBIO) announced that it received notice from the European Patent Office that the opposition period expired for a bio-defense product patent granted to iBio, and no opposition was filed.
“This is an important extension of our commercial platform,” said Robert Erwin, iBio’s president, “We expect our success with vaccine and therapeutic product candidates for use against serious infectious disease agents with weapon potential, such as plague bacillus, to be of interest to governments and companies engaged in supplying disease countermeasures.”
This week, iBio has jumped in price by as much as 24 cents and volume has also been on the heavier side. Current short interest as of 4/24 shows a little under $2m.
Teva Pharmaceutical Industries (TEVA) as well as Mylan NV (MYL) are also finding positive outcomes in this biotech bull market. Teva Recently announced that the company has offered to buy Mylan for $82 a share, or $40 billion. Teva’s proposal values Mylan at 20 times S&P’s 2015 estimated earnings, which is just slightly above the valuation of its peers.
Teva’s offer to acquire Mylan has prompted S&P Capital IQ to reiterate its buy recommendation on Mylan. “Teva would need to raise its (stock-and-cash) offer price and lower the stock component to get Mylan to agree to an offer,” says Jeffrey Loo, analyst at S&P Capital IQ. So he has raised his price target for Mylan by $13 a share, to $92, or 22 times his 2015 earnings estimate. Since the buyout announcement, Mylan’s stock has jumped as of yesterday 8.77%, to $74 a share. Teva’s stock also leaped, to $64, up 1.25%.