4 Biotech Stocks Moving on Buyout Buzz

SNY stock has recently benefited from a round of short covering

by Karee Venema

Published on Jan 22, 2018 at 10:58 AM
Updated on Jun 24, 2020 at 10:16 AM

Juno Therapeutics Inc (NASDAQ:JUNO) agreed to be bought out by Celgene Corporation (NASDAQ:CELG), confirming last week's reports in the Wall Street Journal. CELG already owns a 9.7% stake in JUNO, but will purchase the remainder of the company in an all-cash deal valued at roughly $9 billion, or $87 per JUNO share -- allowing it access to the Seattle-based firm's CAR-T cancer drug pipeline.

At last check, JUNO stock was trading up 27% at $86.09 -- earlier topping out just shy of the purchase price, at $86.28. CELG stock, on the other hand, is trading down 1% at $101.62. This downside isn't anything new for Celgene shares, which have shed roughly 26% in the past six months, and recent resistance forming at the stock's 60-day trendline.

In spite of CELG's technical troubles, put options have rarely been cheaper compared to their call counterparts. The stock's 30-day implied volatility skew of -1.4% ranks below 99% of all comparable readings taken in the past year.

Sanofi Will Pay $11.6 Billion for Bioverativ

Another biotech buyout making waves today is Sanofi SA's (NYSE:SNY) $11.6 billion all-cash bid for Bioverativ Inc (NASDAQ:BIVV), which works out to $105 per BIVV shares. The purchase will add Bioverativ's hemophilia treatments to the French drugmaker's rare disease portfolio.

BIVV stock is up 62.1% at last check to trade at $103.94, hitting a high of $104.30 in early trading. SNY, meanwhile, has plunged 3.9% to trade at $42.86, bringing its three-month deficit to 13.7%. More recently, the security's rally off its late-December lows was swiftly rejected by Sanofi's 60-day moving average, a trendline that helped usher the shares higher from April through June of last year.

Part of Sanofi's recent rebound was likely fueled by short sellers, with short interest down 22.92% in the most recent reporting period. However, this source of buying power is nearly depleted, considering it would take a little more than one session to cover the remaining shorted SNY shares.


A Schaeffer's 39th Anniversary Exclusive!

8 Top Stock Picks for 2020

Access your FREE insider report before it's too late!


  
 
 

Partnercenter