Stocks rose slightly on Monday as investors looked forward to the meeting of the Federal Reserve this week. The Dow Jones Industrial Average (^DJI -0.45%) and the S&P 500 (^GSPC -0.98%) posted modest gains of about 0.1%.
Today's stock market
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Pfizer strengthens its position in cancer
Shares of cancer-fighting specialist Array BioPharma soared 56.9% to $46.44 after the company agreed to be acquired by Pfizer in a deal worth $11.4 billion. Pfizer is paying $48 per share in cash for the Colorado-based biotech after the boards of both companies approved the acquisition. Pfizer stock inched up 0.3%.
Array BioPharma won FDA approval a year ago for its combination drug Braftovi and Mektovi in treating metastatic melanoma with a mutation called BRAF. The market for that indication is about 13,500 patients annually worldwide, but last month the company also reported positive results from two late-stage trials for the drugs in colorectal cancer, opening up the possibility of the first chemotherapy-free treatment for up to 30,000 patients per year with the disease. Array has 13 other drugs in its clinical pipeline.
Pfizer is taking advantage of its strong balance sheet and enormous cash flow to strengthen its long-term position in oncology, the fastest-growing segment of the pharmaceutical industry. The company expects the deal to lower earnings per share by $0.04 to $0.05 in the next two years but add to earnings in 2022 and after.
Sotheby's lands a bid
Auction house Sotheby's announced it was being acquired by media entrepreneur and art collector Patrick Drahi for $57 in cash, and the stock soared 58.6% to $56.13. The deal returns Sotheby's to private ownership after having been a public company for 31 years.
The purchase price values the Sotheby's enterprise at $3.7 billion. The stock has been an up-and-down experience for investors, rising more than 200% between early 2016 and mid-2017 but going mostly downward since then. Despite the steep premium for the shares, the buyout price for the icon of income inequality is still below the 52-week high.
Sotheby's CEO Tad Smith alluded to the freedom the company will have in private hands, saying in the press release, "This acquisition will provide Sotheby's with the opportunity to accelerate the successful program of growth initiatives of the past several years in a more flexible private environment."