Pfizer’s (PFE) announcement that the company will purchase Medivation (MDVN) in a deal worth $14 billion acquisition caused the IBB, the largest Nasdaq biotech ETF, to jump 2% on the day. The acquisition has fueled the rise of the ETF and has caused investors to flock to pharma and biotech stocks as hopes of future deals could materialize.
Two pharma stocks benefitting from the acquisition the most are:
1. Regeneron Pharmaceutical (REGN)
Regeneron jumped over 3.5% on Monday morning following the Pfizer deal. The company’s reports have been relatively quiet since the company announced their Q2 earnings report earlier in the month. The company posted an EPS of $2.10 a share, surpassing an EPS of $1.66 during the same quarter a year prior.
The company announced an agreement with BARDA to test and manufacture a new antibody that fights against the MERS virus on Monday.
Regeneron also announced that the Department of Health and Human Services (HHS) will provide $8.9 million in funding to label and support packing of the new antibodies.
2. Alexion Pharm Inc. (ALXN)
Alexion’s stock rose nearly 3% between Friday’s close and Monday’s close. The company’s stock has been relatively cheap, and it’s no surprise that investors have finally flocked to Alexion as a result.
The undervalued stock does have issues ahead for investors in the short-term.
The company develops products to battle immune system diseases, cancer, inflammation and heart disease. The company’s current year earnings have been revised down 4.7%, according to Zacks Consensus Estimate.
Robust revenue growth and solid financials are a plus for the company. Disappointing return on equity has caused the stock to suffer. The company has not made any significant announcements as of late.
Alexion’s stock fell in June, as the company’s muscle drug trial failed to meet the company’s goal.
Despite a quiet month for the company, Alexion’s stock has risen over 7% over the past 30-day period.
