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Why Emeritus Corporation and Isis Pharmaceuticals, Inc Won Huge Today

By Dave Williamson - Feb 21, 2014 at 8:14PM

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Here's what drove Emeritus Corporation and Isis Pharmaceuticals skyward today.

Two big winners in the health-care space today were Emeritus Corp (NYSE: ESC) and Isis Pharmaceuticals (IONS 2.67%). In this video from Friday's Market Checkup, Motley Fool health-care analyst David Williamson takes a look at what caused shares to pop.

Seattle-based Emeritus saw shares shoot up more than 35% today on the news that it had agreed to be bought out by Brookdale Senior Living (BKD 2.49%). The combined company will have a presence in 46 states and, with more than1100 facilities, will have a 10% market share. Due to reimbursement cuts from Medicare, scale is vital in this industry, so this could be a very beneficial deal. However, David mentions some caveats that investors will want to keep in mind. He suggests a "wait and see" strategy here, to see if these companies are, in fact, better together than apart.

Also, Isis Pharmaceuticals shot up 15% today after the orphan drugmaker reported positive phase 2 trial results for its drug focused on the rare spinal disorder spinal muscular atrophy. While some analysts have been calling this a potential blockbuster, David tempers enthusiasm, saying it's probably still a bit too early to be making that call. However, he does call attention to the company's partnership strategy and vast number of pipeline assets as indicators that this is definitely more than a one-trick pony, and certainly a company to watch.

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Stocks Mentioned

Sanofi Stock Quote
Sanofi
SNY
$55.15 (-0.63%) $0.35
Ionis Pharmaceuticals, Inc. Stock Quote
Ionis Pharmaceuticals, Inc.
IONS
$37.63 (2.67%) $0.98
Biogen Inc. Stock Quote
Biogen Inc.
BIIB
$206.20 (0.97%) $1.98
Brookdale Senior Living Inc. Stock Quote
Brookdale Senior Living Inc.
BKD
$5.77 (2.49%) $0.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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