M&A and clinical catalysts revive biotech
The biotech sector is experiencing a significant rally driven by major M&A activity, corporate investments, and upcoming clinical trial data.
The argument
Angelica Peebles highlighted that the XBI biotech ETF surged over 10% in five days, buoyed by the $11 billion acquisition of Apogee Therapeutics, Eli Lilly's $100 million investment in Absci, and anticipation of Moderna's phase 3 personalized cancer vaccine data.
The thesis, stress-tested
✓ What validates it
- ✓Moderna releases positive phase 3 data for its cancer vaccine
- ✓Further mid-to-large cap biotech acquisitions are announced
▸ Risks discussed
- ▸Clinical trial failures could rapidly reverse gains
- ▸High interest rates could pressure pre-revenue biotech valuations
Hear it yourself
"So it's just those big numbers, Frank. I think they're hard to get for investors to really capture their head on. So I think that the fundamentals are going to be great. I have some concern just about the sustainability of investors' appetite around this. I think that's the, kind of the key. So, again, I think that the June numbers are really going to come through in spades. But, ultimately, the key question is, will investors underwrite those? And when it comes to the underwriting piece, it's sustainability question. And so"
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE