AveXis (AVXS) soared over 81% on Novartis (NVS) offer to buy the Company for $8.7B in cash and sparked another rally in gene therapy stocks . AveXis’ lead product AVXS-101 is expected to enhance Novartis’ position as a gene therapy and neuroscience leader. The FDA has granted AVXS-101 an Orphan Drug Designation and Breakthrough Therapy Designation for treatment of spinal muscular atrophy or SMA Type 1.
Biotech stocks fell through a critical bottom last Friday but today soared in early trading on this deal. Buyer enthusiasm faded later in the day presumably on macro news that chilled the market overall about 2p EDT ending with the S&P down 37 points at 2613 but still positive.. The XBI was still up 2.67% at the close holding near a downside technical level at $85.11.The FBT was a leader up 5.36% to $132.27 and the IBB was up 1.82% trading near its recent triple bottom at $102.87.
Normally this kind of M&A news would be an opportunity to load up on biotechs but technicals are still weak and crosscurrents from economic and macro news create a risk- off sentiment.
Gene therapy stocks rallied on the deal: BLUE up 6.48%, CLLS up 1.07%, CRSP up 3.67%, EDIT up 1.47%, NTLA up 2.54%, ONCE up 13.37% and SGMO up 5%.
Agios Pharmaceuticals (AGIO) soared 9.26%, up 33.7% YTD on buyout speculation as a result of the AveXis deal. Agios and 16 other mid-caps were on our momentum and buyout speculation list. AVXS was also on the list.