The biotechnology segment rallied Monday with small-cap biotech names and related exchange traded funds leading the charge after Gilead Sciences (NasdaqGS: GILD) acquired Kite Pharma (NasdaqGS: KITE).

The iShares Nasdaq Biotechnology ETF (NASDAQGM: IBB), the largest biotechnology exchange traded fund by assets, rose 1.7% Monday.

Meanwhile, the Loncar Cancer Immunotheraphy ETF (NasdaqGM: CNCR), which tracks companies that are developing new classes of therapies, jumped 5.4%; the BioShares Biotechnology Clinical Trials Fund (NasdaqGM: BBC), which tracks potential up-and-coming biotechnology companies that are in the clinical trials stage, increased 3.5%; and the ALPS Medical Breakthroughs ETF (NYSEArca: SBIO), which focuses on small- and mid-cap companies that have one or more drugs in either Phase II or Phase III U.S. FDA clinical trials, gained 3.2%.

The biotech sector strengthened on news that Kite agreed to be bought by Gilead for $11.9 billion or $180 per share, a 29% premium over the last closing price for the stock, Bloomberg reports.

On Monday, GILD was up 1.7% to $75.8 per share while KITE was 28.1% higher to $178.2 per share.

“A lot of people were too cautious about how big it was going to be out of the gate,” Corey Davis, an analyst at H.C. Wainwright & Co. who had the the highest price target on Kite shares, told Bloomberg. “It’s a completely fair price. They probably didn’t haggle a lot and Gilead offered them what was appropriate.”

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