Beaten-down biotechnology stocks have been so cheap for so long, rattled investors pray every day that a big drug company with firepower will swoop in and buy one to spark interest in the industry.
They got their wish Monday when Pfizer PFE, +1.27% said it agreed to acquire Anacor Pharmaceuticals ANAC, -0.13% for $5.2 billion. Elsewhere, a battle over cancer-drug company Medivation MDVN, +0.03% is heating up. Sanofi SNY, +3.01% is turning the screws to get the company to agree to a takeover, and other bidders are circling.
Those takeover efforts are a good signal that biotech stocks are just too cheap — in case you hadn’t noticed. This is just one of several reasons the group may soon take a sustained turn for the better, say biotech experts.