Advertisement
U.S. markets open in 3 hours 9 minutes
  • S&P Futures

    5,304.50
    -3.75 (-0.07%)
     
  • Dow Futures

    40,131.00
    -13.00 (-0.03%)
     
  • Nasdaq Futures

    18,486.75
    -17.00 (-0.09%)
     
  • Russell 2000 Futures

    2,135.60
    -2.80 (-0.13%)
     
  • Crude Oil

    81.96
    +0.61 (+0.75%)
     
  • Gold

    2,218.70
    +6.00 (+0.27%)
     
  • Silver

    24.58
    -0.17 (-0.69%)
     
  • EUR/USD

    1.0787
    -0.0042 (-0.39%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    12.98
    +0.20 (+1.56%)
     
  • GBP/USD

    1.2609
    -0.0029 (-0.23%)
     
  • USD/JPY

    151.4100
    +0.1640 (+0.11%)
     
  • Bitcoin USD

    70,461.42
    +466.74 (+0.67%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,965.48
    +33.50 (+0.42%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Weekly Mid-Cap Update: Medivation Rose, Rejected Sanofi’s Offer

Weekly Update: April's Final Week Saw Biotechnology Stocks Plunge

(Continued from Prior Part)

Reviewing mid-caps

The mid-cap stocks of biotechnology (or biotech) ETFs underperformed the SPDR S&P 500 ETF (SPY), which fell by 1.3%, in the week ended April 29, 2016.

The mid-cap stocks of the iShares Nasdaq Biotechnology ETF (IBB) fell by 6.2%, while the mid-cap stocks of the Health Care Select Sector SPDR ETF (XLV), the SPDR S&P Biotech ETF (XBI), and the iShares US Medical Devices ETF (IHI) fell by 6.6%, 6.5%, and 2.2%, respectively.

The above graph reflects the performances of the mid-cap stocks of different biotech ETFs in comparison with SPY for the week ended April 29, 2016.

Medivation stock zooms up

Among the mid-cap stocks, only a few rose during the week ended April 29, 2016. These included Integra Lifesciences (IART) and IDEXX Laboratories (IDXX), which rose by 6.6% and 4%, respectively.

However, the biggest mid-cap rise was seen by Medivation (MDVN). MDVN rose as it rejected a hostile takeover bid from Sanofi (SNY). In a press release, Medivation “announced that its Board of Directors, after consultation with its financial and legal advisors, unanimously determined that the unsolicited proposal from Sanofi to acquire Medivation for $52.50 per share in cash substantially undervalues Medivation and is not in the best interests of the company and its stockholders.”

Medivation closed at $57.8 for the week ended April 29, 2016, and it was trading above its 20-day moving average. Year-to-date (or YTD), the stock has risen by 19.6%. However, its relative strength index (or RSI) is at 74, indicating that it has temporarily moved into an overbought situation.

The stock has a 2016 forward price-to-earnings (or PE) multiple of 45.3x. Medivation has a book value of $5.32 per share, and with its current price, it’s trading at a price-to-book value of ~10.9x. Medivation has a weight of ~1% in IBB and 1.6% in XBI.

Browse this series on Market Realist:

Advertisement