Deals
Cytokinetics took a JPM round trip
Cytokinetics, maker of an effective treatment for a genetic heart disease, entered JPM Week trading at about $88 a share. Then came news, from the Wall Street Journal, that Novartis was close to acquiring the company, sending Cytokinetics up more than 20% and setting in motion a will-they-won't-they story that endured all week. But now it's Thursday and JPM has concluded without Cytokinetics changing hands, a series of facts that were enough to send the company right back to about $88 a share.
This will all be lost to history if it ends up being the prelude to a multibillion-dollar deal, but Cytokinetics' trading pattern might be instructive as biotech tiptoes out of its slump. Investors are so wedded to the "takeout thesis" — valuing companies according to the odds someone else will want to buy them rather than, you know, the drugs they've invented — that every minor twist in a negotiation makes for volatile days at the market.
A similar pattern played out with biotech stocks at large. The XBI, a bellwether index, started the week up more than 5%, driven by a spate of deals announced at the outset of the conference. Then, when the pace of M&A slowed, it fell nearly 3% on Thursday.
recap
How JPM played out
With the rush of meetings, receptions, and groggy treks through sodden streets, you can be forgiven for missing some of the news out of J.P. Morgan. Here's a look at what drove conversations at the conference.
Deals. There were about a half-dozen transactions disclosed this week, including Johnson & Johnson buying the cancer firm Ambrx, Merck acquiring Harpoon Therapeutics, and GSK paying more than $1 billion for a startup called Ailos Bio.
AI. The hottest commodity at the conference was breathing room at a presentation by Nvidia, the roughly $1 trillion maker of computer chips, where the company proclaimed that novel technology would dramatically increase the number of new medicines that are created while reducing their cost. Isomorphic Labs, a drug development arm of Google's DeepMind, inked deals with Eli Lilly and Novartis at this J.P. Morgan conference. Insitro, another AI-focused biotech, presented data that it may be able, for instance, to estimate the number of people who have liver disease from bone scans, making it possible to do more genetic research.
The FDA. Peter Marks, the agency's top regulator of gene therapies, seems to be leaning toward granting full approval to Elevidys, the Sarepta Therapeutics gene therapy for Duchenne muscular dystrophy. His words, delivered at a STAT event, sent shares of Sarepta up more than 20%.
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