Shares of Pharmacyclics (NasdaqGS: PCYC), a maker of cancer treatments, rose more than 2% during Wednesday’s after-hours session following a 6.3% surge on almost two and a half times the average voile during tradition trading hours on reports Dow component Johnson & Johnson (NYSE: JNJ) was preparing to make an offer for the company.
Expect Pharmacyclics and some of the exchange traded funds that hold it to open significantly higher today on news that AbbVie (NYSE: ABBV) is offering $21 billion, or $261.25 per share in cash and stock, a 13 percent premium to Pharmacyclics stock’s closing price on Wednesday
When news initially broke last week that California-based Pharmacyclics was mulling a sale, J&J and Swiss pharma giant Novartis (NYSE: NVS) were identified as possible suitors at a price tag that could reach up to $19 billion. [A Familiar ETF for Pharmacyclics Takeover]
At that time the First Trust NYSE Arca Biotechnology Index Fund (NYSEArca: FBT) looked to be the one ETF that would benefit from a takeover of Pharmacyclics, but the stock’s recent surge in market value has elevated its standing in several other funds. As of March 3, the $2.9 billion FBT had a 4.6% weight to Pharmacyclics, making the stock the ETF’s second-largest holding. [2014’s Top Healthcare ETF]
Several other ETFs are likely to enjoy a takeover of Pharmacyclics, particularly if the premium is high. Proving that some hedge funds are fans of the stock, the AlphaClone Alternative Alpha ETF (NYSEArca: ALFA) has a modest weight to Pharmacyclics.
ALFA tracks holdings selected from quarterly hedge fund disclosures. The SEC Form 13F, or Information Required of Institutional Investment Managers Form, is a quarterly filing required of institutional managers with over $100 million in qualifying assets. The filing contains information on the manager’s list of recent investing holdings, which provide the public a glimpse of how the heavy weights are moving around the changing markets. [Hedge Fund ETFs Could be Vulnerable in Volatile Markets]
The $526.8 million PowerShares Dynamic Biotechnology & Genome Portfolio (NYSEArca: PBE) also has legitimate Pharmacyclics credibility. That ETF, which is up nearly 10% this year, had a 5% Pharmacyclics as of March 3, making the stock the ETF’s sixth-largest holding.
PBE’s underlying index evaluates companies for inclusion based on “price momentum, earnings momentum, quality, management action, and value,” according to PowerShares.
PowerShares Dynamic Biotechnology & Genome Portfolio
