Bristol-Myers Squibb Company (NYSE: BMY) is commencing today, through its wholly owned subsidiary B&R Acquisition Company, a cash tender offer to purchase all outstanding shares of common stock of Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN). Bristol-Myers Squibb announced on Friday, June 29, 2012, its intent to acquire Amylin.
Upon the successful closing of the tender offer, stockholders of Amylin will receive $31.00 in cash for each share of Amylin common stock validly tendered and not validly withdrawn in the offer, without interest and less any applicable withholding taxes. Following the purchase of shares in the tender offer, Amylin will become a subsidiary of Bristol-Myers Squibb.
Eoin Treacy's view Biotech experienced a phenomenal bull market in the late 1990s as the promise of incredible life enhancing treatments inspired investor interest. In the crash that followed, a process of rationalisation occurred as the companies with viable products were winnowed from a considerable amount of chafe. More than a decade later some of the therapies that were dreamed of are beginning to finally come to market and interest is once more being stoked.
Given the considerable profit potential from innovation in gene and stem cell technology, large well capitalised pharmaceuticals have been attempting to buy smaller rivals. Roche has so far failed to acquire Illumina and it remains to be seen if Bristol Myer Squibb will be successful in acquiring Amylin. (Also see Comment of the Day on January 30th).
Amgen continues to extend its most recent breakout and while becoming increasingly overbought relative to the 200-day MA , a sustained move below the trend mean, currently near $67, would be required to question medium-term scope for additional upside. Biogen and Alexion Pharmaceuticals have relatively similar patterns.
Seattle Genetics surged from early June and has paused in the region of $25. Potential for mean reversion has increased but a sustained move below the 200-day MA would be required to question medium-term upside potential.
Immunogen, The Medicines and Incyte Corp continue to extend their respective breakouts and are becoming increasingly susceptible to mean reversion. Cambrex Corp encountered resistance last week in the region of $10 following an impressive advance, suggesting mean reversion is underway.
Cubist Pharmaceutical found at least short-term support last week in the region of the 200-day MA and will need to hold above $37 if the medium-term upside is to continue to be given the benefit of the doubt. Curis Inc found support in the region of the MA from mid-June and has rallied back to test the peak near $5.50. A sustained move below the MA would be required to begin to question medium-term upside potential.
Gilead Science pulled back sharply in February but found support in the region of the 200-day MA and continues to post a progression of higher reaction lows. A sustained move below $48 would be required to question medium-term scope for continued higher to lateral ranging. Resmed has a relatively similar pattern.
Celgene pulled back sharply from the April high and has returned to a potential area of support near $60. However it will need to sustain a move back above the 200-day MA if potential for recovery is to be given the benefit of the doubt. Life Technologies, Illumina, Halozyme Therapeutics, Arqute and Staar Surgical share a similar pattern
Myriad Genetics, Chindex International, Novabay Pharmaceuticals and Theragenics Corp are testing the upper sides of their respective bases while Antigenics has found support in theregion of its 200-day MA following a steady reversion towards the mean.