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FDA Approval and a Generic-Drug Maker Arms Race Propel Winners

Anika Therapeutics (NASDAQ: ANIK  ) is the big winner in biotech this week, with shares having increased by a third of their value after receiving FDA approval for Monovisc, an osteoarthritis treatment injected directly into the knee. Johnson & Johnson  (NYSE: JNJ  ) will be marketing the drug, with Anika receiving an upfront payment of $5 million and double royalties. While Motley Fool health-care analyst David Williamson notes that at first blush, it may look as though investor enthusiasm around this stock has become a bit overzealous, he thinks the company's growth definitely makes it one for the watchlist.

Meanwhile, investor excitement is also ramping up around Mylan (NASDAQ: MYL  ) , which stated in its press release on the subject of future M&A activity that "we currently expect to be in a position to execute on another substantial transaction this year." David notes that it isn't just Mylan's aggressive growth posture, as the company also beat estimates for its Q4 results and, more importantly, impressed with its 2014 guidance. All that, plus a generic version of the MS drug Copaxone coming down the pipeline, definitely makes this a stock David will be watching closely as well.

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David Williamson

The Motley Fool's Healthcare Analyst, I specialize in Pharma, Biotech, and how the ACA (Obamacare) is changing the business of healthcare in America. Follow me on Twitter for breaking stock news, policy thoughts, and misc musings...

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8/28/2015 1:06 PM
AGN $308.26 Down -3.74 -1.20%
Allergen PLC CAPS Rating: ****
ANIK $35.77 Up +0.16 +0.45%
Anika Therapeutics… CAPS Rating: ****
JNJ $94.92 Down -1.30 -1.35%
Johnson & Johnson CAPS Rating: ****
MYL $50.19 Down -1.30 -2.52%
Mylan CAPS Rating: *****