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Why Danaher, CRISPR Therapeutics, and Clementia Pharmaceuticals Jumped Today

By Dan Caplinger – Updated Apr 20, 2019 at 6:23PM

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A big day in biotech helped lift the market.

Monday was solid on Wall Street, as stock market indexes generally finished higher. An extension for trade talks between the U.S. and China seemed to hold out the promise for a longer-term deal, and a rise in merger and acquisition activity was noteworthy for several key companies. Danaher (DHR -0.34%), CRISPR Therapeutics (CRSP 2.45%), and Clementia Pharmaceuticals (CMTA) were among the top performers. Here's why they did so well.

Danaher picks up a big asset

Shares of Danaher rose 8.5% after the science and healthcare technology company agreed to pay $21.4 billion to acquire the biopharmaceutical business of the GE Life Sciences unit of General Electric. Danaher said that the deal should add to the company's overall adjusted earnings within the first year after the acquisition closes, and CEO Thomas Joyce believes that the purchase will "advance our growth and innovation strategy in an important and highly attractive life science market." In addition, Danaher said that it's considering doing an IPO of its dental business, but with potential negative consequences for its bond rating from doing a big cash deal, Danaher's future strategy isn't entirely set in stone.

Check out the latest Danaher earnings call transcript.

Needle injecting cell held in place by instrument.

Image source: Getty Images.

CRISPR reaches a milestone

CRISPR Therapeutics stock jumped 25% following the company's latest business update and the release of its fourth-quarter financial report. The biopharmaceutical specialist isn't yet bringing in any substantial revenue, but its cash position nearly doubled from year-ago levels. That gives CRISPR plenty of money to use in developing treatments, and with news that the first patient in a trial using a therapy that involves the company's technology got enrolled, investors are more optimistic than ever that CRISPR will make a breakthrough that leads to a blockbuster drug in the long run.

Clementia soars on buyout news

Finally, shares of Clementia Pharmaceuticals skyrocketed more than 74%. The Canadian biotech company got a buyout offer from French biopharma Ipsen that could be worth as much as $1.31 billion. Under the deal, Clementia shareholders will receive $25 per share in cash, plus a contingent value right that could add as much as $6 per share more if the U.S. Food and Drug Administration accepts an application for Clementia's palovarotene candidate treatment for rare bone disorders. The move offers a quick payoff for shareholders, but it also takes away the potential upside that they could have seen if Clementia had remained independent until after getting FDA approval.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of CRISPR Therapeutics. The Motley Fool has a disclosure policy.

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