Today Gilead investors finally got the news they had been waiting for so long- a transformational acquisition. The firm put their cash hoard to good use gobbling up Kite Pharma for $11.9 billion or $180 per share. Even after the acquisition the larger company would still have well over $25 billion in cash, leading me to believe further deals are possible. Even if Gilead does not acquire again in the near term, there are plenty of other cash rich biotech and large pharmaceutical companies with the firepower to do so. I expect the tailwind has the potential to last into the fourth quarter and beyond (especially if other acquisitions occur), boosting the biotech sector to new heights of optimism as well as positively affecting the Runner of the Year model account.
IBB data by YCharts
Figure 1: Is $330 the next stop? (source: YCharts)
