Biotechnology is rising up to analyst’s predictions that a near future run could send related stocks and exchange traded funds (ETFs) up. The latest April announcement that Takeda Pharmaceutical would buy Massachusetts-based Millennium Pharmaceuticals (MLMN) for $8.8 billion sent the MLMN shares higher than they’ve been in a while, reports Don Dion for Seeking Alpha.
Millennium sells the anti-cancer injection drug Velcade, and is lifting investor’s expectations for a biotech sector run. PowerShares Dynamic Biotech & Genome (PBE) could especially benefit, as 80% of this ETF consists of small-mid-cap stocks that will benefit from the acquisition. PBE holds 8.4% in MLMN. It’s down 5.2% year-to-date.
Other biotech ETFs that could experience a shot in the arm:
- SPDR Biotech (XBI), down 3.9% year-to-date
- iShares NASDAQ Biotechnology (IBB), down 4.7% year-to-date
- First Trust AMEX Biotechnology (FBT), down 4.9% year-to-date
- Biotech HOLDRs (BBH), holds 1% in MLMN, up 1.8% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.