What happened

According to S&P Global Market Intelligence, shares of the top biotech company Celegene Corp. (NASDAQ:CELG) rose by a healthy 11.56% last month. The drugmaker's shares apparently benefited from the news that President Trump plans to take a far more pharma-friendly approach to the prescription drug pricing controversy than many onlookers were expecting.

In fact, industry insiders believe that Trump's executive order on the matter will ultimately focus on increasing competition as the primary vehicle to lower prices -- instead of more aggressive measures such as hard caps for expensive specialty medicines.      

Pills on a pile of money.

Image source: Getty Images.

So what

Celgene has been one of the fastest growing biotechs for awhile now and that trend should hold over the course of the next five years or so, according to various analysts. However, one of the main drivers behind Celgene's double-digit top-line growth has been the company's steady price hikes for its flagship multiple myeloma drug Revlimid. So it's not particularly surprising that investors cheered President Trump's unexpected u-turn on the drug pricing debate by bidding up Celgene's shares last month.

Now what

If anything, Celgene's reliance on sky-high prescription drug prices is only going to grow as the company gears up to enter the multiple sclerosis market with ozanimod, and continues to grow the sales of its plaque psoriasis medicine Otezla. Not to mention the company's aspirations of building a position in the emerging adoptive cell therapy market. Anti-cancer cell therapies tailored to individual patients, after all, are widely expected to sport some truly spectacular price tags once they reach the market. The key point is that Celgene's shares appear primed to move even higher now that the threat of hard-line price control measures are off the table seemingly for the duration of Trump's time in office.  

George Budwell has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Celgene. The Motley Fool has a disclosure policy.