Biotech bulls are running: Celgene, Biogen and More

If Celgene (NASDAQ:CELG) is the bellwether for the biotech sector then we can look forward to some exciting times. Biotech stocks have been on their worst run for decades, but there are indications are that the sector is getting ready to recover.
Celgene is now seeing a return to favor from investors, which has driven a rapid increase in share price from $94.85 on June 27th up to $116.50 on August 4th 2016.
There is still plenty of upside—the stock has not yet hit its high of July 2015, when shares of Celgene hit $139. With experts expecting Celgene to lead the sector over the next 12 months, this is a stock to follow.

Confidence in the biotech sector was eroded by negative media and political attention due to controversy surrounding high drug prices. That rhetoric is expected to continue through the US Presidential election. However this focus tends to be on pharmaceutical companies increasing costs for known drugs. Companies like Celgene who focus on oncology and immunology are developing new treatments for diseases where doctors and patients have limited or no treatment options beyond chemotherapy.
Mergers and acquisitions will play a role for investors in the biotech recovery. New finance flowing in after the challenges of the past year means some small cap and mid cap management teams may look favorably on the benefit of joining forces to scale. Another reality due to the suppressed valuations is acquisitions will look very attractive to groups like Celgene, who have a market cap of over $90 billion.
Merrill Lynch is very bullish on big biotech highlighting Biogen (NASDAQ:BIIB), and is raising their target for the stock to $374 compared to a general Wall Street target of $333.60. Investors could be speculating on the stock as there have been rumors of a buyout from Merck (NYSE:MRK) or Allergan (NYSE:AGN), but shares of the company have run from $224.60 on June 27 to $316.03 on Thursday.
Not all analysts are excited by these big biotech companies, comparing them to big pharma without the dividend. It has been said biotech stocks used to be growth stocks and are now stagnant.
But the movements of Biogen and Celgene over the last month suggest a recovery is underway.
Small cap stocks are also catching the wave with Q BioMed (OTCMKTS:QBIO) up over 100 percent in the last 2 weeks to $3.00 and DelMar Pharmaceuticals (NASDAQ:DMPI) has also been running in the last week from $6.58 to $7.46. There are deals out there and the sector is coming back to favor with investors who looking for growth and undervalued companies.
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Securities Disclosure: I, Nick Smith, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Q BioMed and DelMar Pharmaceuticals are clients of the Investing News Network. This article is not paid for content.