Another Biotech Deal, Another Rally

• Bristol-Myers Squibb Expands Immuno-Oncology Pipeline With Nektar
• FBT up 2.8%, IBB up 2%, XBI up 2.6%: Momentum Returns
• Market Ignores CPI  News with NAZ Up 1.9% but 10 yr Yield is 2.91%

Biotech stocks soared at the opening on news that Bristol-Myers Squibb (BMY) will pay $1.85B for a Cancer Deal with Nektar Therapeutics (NKTR). The transaction involves a 5% equity position, $1B cash upfront and development milestones potentially worth $3.6B to Nektar for a CD-122 biased Agonist, NKTR-214. The Nektar immunotherapy-oncology drug will be developed in combination with Bristol-Myers’ drugs Yervoy and Opdivo in more that 20 indications across 9 tumor types. NKTR-214 is an investigational immuno-stimulatory drug designed to selectively expand cancer fighting T Cells and natural killer (NK) cells in a  tumor micro-environment and increase PD-1 expression in those immune cells.

Bristol-Myers Squibb (BMY), a leader in the immuno-oncology therapies rallied 2.6% to on the news since it strengthen their broad immuno-oncology pipeline while NKTR soared 11% to $84 and a market cap of over $13B. BMY has been a laggard, but was up 2.4% to $65.60 near its 52 week high and added to the Rayno Biopharmaceutical Portfolio on 2/16/16 at price of $61.

Biopharmaceutical stocks rallied broadly with big large-cap movers: ALXN, AMGN, RHHBY; and mid-caps ALKS, BLUE, BPMC, NBIX and SGEN. Smaller caps were wildly up.