Shares of $MDVN Light a Fire Under the Whole Biotech Sector

After announcing that they’d hired JP Morgan to discuss ‘takeover approaches’ and this morning’s Credit Suisse note that said the company was worth $75 on a takeover, the entirety of the biotech sector–led by MDVN–has caught fire today. It’s worth noting, the $75 target, affixed by Credit Suisse on a takeover, is an all-time high. This has the crazy people out shopping biotech again.

INCY +6%
BMRN +6%
JAZZ +6%
ALNY +7%
SGEN +4%
IONS +5.5%
JUNO +5.5%

Then you have a slew of smaller biotechs, like RARE, ACRS, EDIT, up double digits. We’ve seen this all before. Nevertheless, biotech has been the worst performer of Q1, lower by 27%. Many of these stocks are down 50% over the past 6 months, due to political jawboning and also because of VRX. The core thesis against the sector is that pricing power will dissipate, as the politicians crack down on predatorial, Valeant like, practices.

We’ll see about that.