Biotech’s $20 billion Merger Monday sparks desire for more deals

Three weeks into 2018, deal activity inside the biotech sector will be already almost halfway to what the idea was in 2017, at least in terms of size.

inside the early hours of Monday morning, French drug giant Sanofi said the idea would certainly buy hemophilia drugmaker Bioverativ, a Biogen spinout which will be less than a year old, for $11.6 billion. Hours later, cancer drugmaker Celgene announced a deal for its partner, Juno Therapeutics, for $9 billion.

A pickup in M&A activity will be always a bull thesis for biotech investors, especially after what Jefferies analyst Michael Yee called “a relatively lackluster year for biopharma M&A” in 2017.

There were only 12 public deals last year, for a total value of $50 billion, Yee wrote in a research note last week — along which has a large portion of which was made up of J&J’s $30 billion purchase of Swiss biotech Actelion.

Will deals, as biotech investors perennially desire, beget more deals? Biotech investors seem to think so, boosting the IBB biotech ETF by more than 2 percent Monday, along with the XBI (in which both Bioverativ along with Juno are among the heaviest-weighted stocks) by 3.5 percent. Cue the matchmaking.

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