Markets

Sector Update: Healthcare

Healthcare stocks were slightly higher Tuesday afternoon with the NYSE Healthcare Sector Index adding about 0.1% and shares of healthcare companies in the S&P 500 climbing 0.2% as a group.

In company news, Telik ( TELK ) shares soared Tuesday after the oncology drug company late yesterday accepted a merger offer from privately held MabVax Therapeutics.

TELK shares were up nearly 26% at $1.57 each in late trading this afternoon, earlier climbing to within 9 cents of its 52-week high of $2.15 a share.

Board members at both companies have signed off on the all-stock transaction, with MabVax shareholder also voting to approve the deal. After the deal concludes, TELK shareholders are projected to own around 15% of the combined companies with MabVax shareholders holding the majority stake.

Concurrent with closing of the merger transaction, certain accredited investors have agreed to invest $2.5 million in TELK in support of the merger. The surviving company will remain publicly traded and will be led by MabVax management. TELK CEO Michael Wick will become a board member of the new company.

TELK said it expects to file a proxy statement later this month detailing the deal ahead of a likely sharholder vote sometime in June.

In other sector news,

(+) MCK, Q4 EPS of $2.55 beats by $0.15 per share. Revenue rises 25% to $38.1 billion, beating the Capital IQ consensus by $2.3 million. Guides FY15 EPS in-line with Street view.

(-) ARNA, Q1 net loss of $0.12 per share was $0.02 wider than the Capital IQ consensus. Revenue grows 186.9% over year-ago levels to $6.8 mln but still lag estimates by around $1.18 mln.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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