A Timetable

A few weeks ago I laid out why I believe that the Sanofi/Genzyme deal will be positive for large cap biotech. I now want to lay out a timetable. Usually, the sector gets a boost on the announcement of a deal but I believe the reaction will be muted as the deal has been well telegraphed.

The second boost should come around the closing of the deal when indexers and closet indexers in the health care and biotech space use the Genzyme cash to buy other biotech stocks. I believe managers are drastically underweight biotech so if the group can catch a bid there might be some chasers.

The deal has already received US and EU antitrust approval and should close within weeks.

No comments: