What: On Wednesday, Celldex Therapeutics (NASDAQ:CLDX) jumped more than 11% on no news.
Or, at least, no company-specific news.
So what: Most of the biotech sector was up on Wednesday after Pfizer (NYSE:PFE) and Allergan (NYSE:AGN) announced that their deal was dead in the water. Pfizer had plans to buy Allergan, in part to move its headquarters overseas to avoid U.S. taxes, but President Obama and the Treasury department changed the rules for tax inversions this week. Pfizer decided it was too risky to consummate the deal with the potential that it might still have to pay the high U.S. tax rate.
The result of the broken deal is that Pfizer now has incentive to do other deals. And Allergan could be a purchaser -- rather than an acquisition target -- after it ships off its generic drug business to Teva Pharmaceutical in exchange for $33.75 billion in cash and another $6.75 billion or so in shares of Teva.
Is either company interested in Celldex? There's no way to know. But, as we've previously discussed, Celldex's share price is currently at the mercy of the momentum traders that are more interested in the short-term news than the long-term potential. Wednesday's news was certainly good news for the sector even if Celldex doesn't benefit directly.
Now what: Current shareholders of Celldex Therapeutics aren't going to complain about a double-digit move higher, but keep in mind that momentum can work in the opposite direction, too.