Positive clinical trial results fromGilead Sciences (
) andCelgene (
) released over the weekend lifted biotechnology
to their biggest one-day gains in as many as three months.
Gilead shares gapped up 11.4% to an all-time high of 72.40 in
three and half times average volume after announcing Saturday its
experimental hepatitis C therapies showed a 100% cure rate.
Celgene shares leapt 5.4% to 75.36 in heavy volume after
revealing late Friday that its Abraxane drug increased life spans
of pancreatic cancer patients in a late-stage study.
Both companies are top holdings inMarket Vectors Biotech ETF (
) andiShares Nasdaq Biotechnology (
), which jumped 2.56% and 1.66%, respectively.
BBH, with a 12.93% weighting in Gilead, sports a stellar IBD
Relative Strength Rating of 84 and strong B-
Accumulation-Distribution Rating. This shows that BBH's price
performance is outpacing 84% of the market and institutions are
heavily buying shares.
BBH soared 47.2% year to date vs. 9.48% for SPDR S&P 500 (
). The ETF is consolidating below its 50-day moving average and
trades only 8% below its 52-week high, which is a normal
IBB, with 7.29% in Gilead, is up 27.9% year to date. It has 77
RS and C- Acc-Dis Ratings. It's rebounding from a correction to
its 200-day moving average, which is bullish.
100% Cure Rate
Foster City, Calif.-based Gilead, the world's largest
developer of HIV treatments, said at the American Association for
the Study of Liver Disease's annual meeting in Boston that its
pair of experimental drugs -- GS-7977 and GS-5885 -- combined
with a standard treatment called ribavirin cured all patients
with a particular form of hepatitis C in a second-stage
"These data provide proof of principle that could position
Gilead as best in class in efficacy, safety and convenience,"
Leerink Swann analysts Howard Liang and Gena Wang wrote in a
client note Monday, rating the stock outperform.
Credit Suisse raised its price target on Gilead's stock.
S&P Capital IQ raised its price target and maintained its buy
"We expect Gilead shares to remain volatile due to what we
view as a rapidly advancing and intensely competitive hepatitis C
landscape," Steven Silver, an equity analyst at S&P, wrote in
a client note Monday.
Achillion Pharmaceuticals (ACHN), Idenix Pharmaceuticals
(IDIX), Bristol-Myers Squibb (BMY),Merck (MRK),Vertex (VRTX),
Pharmasset (VRUS) and several smaller firms also make hep C
Celgene of Summit, N.J., -- the fourth-largest biotech firm,
said it would elaborate on its Abraxane study at a medical
meeting in January. The drug already has been approved to treat
breast and lung cancer. Celgene acquired Abraxane when it bought
out Abraxis BioScience in 2010 for $2.9 billion. A late-stage
trial shows the drug also helps patients with melanoma live
longer without getting worse compared with a competing
Leerink Swann rates Celgene outperform. Cantor Fitzgerald
raised its price target and rated it buy.
S&P also raised its price target and maintained a buy
rating. "We view pancreatic cancer among the most difficult
cancers to treat and see this indication representing up to a $1
billion peak annual global sales opportunity," Silver wrote. "We
remain confident in Celgene's growth prospects."