Activist Investors Agitating Biotechs Bring Multi-Bagger Returns

Activist investors have garnered increasing attention, as they try to bend health-care company management to focus on maximizing shareholder value.These proxy fights are important for investors, especially in biotech, where buyouts are the preferred outcome to many holdings. 

The success of Carl Icahn's years-long campaign agitating Forest Labs resulted in a successful takeover by generic drugmaker Actavis. Icahn deservedly crowed about a deal that caused a one-day 28% pop, and ended his time as a shareholder with roughly $1.7 billion in net gains. Investors who jumped in following Icahn's initial investment would have seen three-bagger returns. 

In this segment from Market Checkup, The Motley Fool's health-care focused investing show, analyst David Williamson dives into the activist investor trend, highlights recent successes and ongoing fights, and explains why investors need to watch this action carefully.

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  • Report this Comment On March 14, 2014, at 7:00 AM, Angelstar wrote:

    I just heard that takeover bid talk for Ariad pharmaceuticals is in final stage and announcement can come any moment. Is it correct? can anybody confirm this?

  • Report this Comment On March 18, 2014, at 5:49 AM, Angelstar wrote:

    somebody tweeted about insider news,takeover bid of Ariad Pharmaceuticals...

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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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