As I mentioned in my blog post last week, here is an update on the PCYC/ABBV merger. Bottom line recommendation: hold onto your ABBV stock, post-merger.
Hold Pharmacyclics (PCYC)
from The Medical Technology Stock Letter
Updated from Investment Digest 759, July 23, 2014 Mid-Year Top Picks issue
We may have reached a near-term valuation wall for the biotechs. Stock selection appears more important than ever as the group holds its high levels driven by individual situations.
Just as the sector was appearing to slow down, speculation that Pharmacyclics (PCYC) was put in play from interest at partner JNJ and NVS took center stage. The PCYC/ABBV deal has given the sector another pop. Nonetheless, a pullback appears very likely, and select stocks continue to do well. Hence, stock selection remains key.
With PCYC, at the last minute AbbVie (ABBV) came up the winner, paying $21 billion in a mix of cash and stock.
In our 27 years researching biotech stocks, we have never witnessed the creation of wealth in such a short time with the goal of truly helping cancer sufferers live longer but just as importantly—live a normal life.
Even before joining MTSL—which recommended the stock at $17 per share in early 2012 and continued to recommend it until the very end—Jay Silverman has been researching this company since the early Imbruvica days, when it was known as PCI-32765 and then ibrutinib.
It has been an amazing journey, one in which for lots of reasons we always felt like we were fighting an uphill battle. In the end, CEO Bob Duggan and his team delivered the most magical and rewarding ride ever that, even at the close today, seems to be ending too soon.
One last thought for PCYC shareholders—take the ABBV stock—the sentiment is still too negative.
John McCamant, The Medical Technology Stock Letter, www.bioinvest.com, March 5, 2015