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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
Let's take a look at the top stories in biotech and health care this morning -- keep an eye out for Ariad Pharmaceuticals (NASDAQ: ARIA ) , Exact Sciences (NASDAQ: EXAS ) and MannKind (NASDAQ: MNKD ) .
Ariad up on takeover rumors--again
Perhaps for the tenth time this year, Ariad Pharmaceuticals is moving higher in premarket after a rumor hit the wires about a potential takeover. Today, Jazz Pharmaceuticals (NASDAQ: JAZZ ) is rumored, per the Daily Mail, to be willing to pay $20 a share for Ariad. As a reminder, the Daily Mail was the same source to float the buyout rumor about Eli Lilly, among others, earlier this year. Taking this rumor at face value, Jazz would thus be paying around $5 billion for a company with revenue of less than $100 million. Looking at the issue from a pure valuation perspective, you would have to call me a skeptic about the validity of this new rumor. Despite this problematic valuation, Ariad shares are still up over 7% on heavy volume in premarket this morning.
FDA recommends approval for Exact Sciences' cancer test
Shareholders of Exact Sciences were on pins and needles yesterday as the stock was halted during an Advisory Committee meeting for the company's lead diagnostic test Cologuard. Cologuard is a stool-based test for colorectal cancer and a less-invasive alternative to colonoscopy. Fortunately for investors and patients alike, the committee voted unanimously, 10 to 0, that Cologuard demonstrated safety, effectiveness and a favorable risk benefit profile in a late-stage clinical trial. Shares are presently up over 5% in premarket trading. Looking ahead, Exact Sciences could move much higher if the test comes anywhere near its projected commercial potential. So, you might want to stay tuned to this developing story.
MannKind may "pop" or "drop" today
Today could be a pivotal day in the life of developmental biotech MannKind, as it's widely expected that the briefing documents for the company's Advisory Committee meeting for its inhaled insulin product Afrezza will be released sometime today. If the documents are overtly positive or negative, the stock could move in a big way. By contrast, fairly vanilla documents such as those released yesterday for Durata Therapeutics (NASDAQ: DRTX ) could serve to only deepen the mystery into how the U.S. Food and Drug Administration, or FDA, actually views the product. Regardless, we will finally get a detailed look into Afrezza's two late-stage trials, per the briefing documents. Although the FDA doesn't have to release the documents today, it usually does so two days prior to the Advisory Committee meeting, and it even released the documents for Durata's forthcoming meeting early in the morning yesterday. So, they could come at any time now.
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