Image Source: Karuna Therapeutics Inc () ended nearly 50% up on Friday after Bristol-Myers Squibb Co () said it will buy the biopharmaceutical firm for $14 billion. Analyst shares his view on biotech stocksThe all-cash transaction values each share of Karuna Therapeutics at $330 and helps Bristol-Myers expand its footprint in neurological and psychiatric conditions.KarXT – the lead asset of Karuna Therapeutics is being studied as a possible treatment for schizophrenia, Alzheimer’s, and bipolar disorder, as per the on Friday.Bristol-Myers expects to take about six months to close this acquisition – that suggests a boom ahead, as per Michael Yee – a senior Jefferies analyst.
You’ve got over a $100 billion of cash sitting at big pharma. With these stocks beaten down, you see valuations attractive. I think that’s a positive tailwind going into 2024.
Inflation Reduction Act to boost M&AIn particular, oncology, weight-loss, and neurology are the key areas that are expected to drive merger and acquisitions in the coming year, Yee added on CNBC’s “” on Friday.Names he expects to participate the most in in 2024 include Pfizer, Merck, Gilead, and Bristol-Myers. Yee is convinced the inflation reduction act will make the pharma giants “do more deals” as well.The Jefferies analyst also picked Amgen Inc in his interview as a stock worth owning especially since it’s scheduled to report the “big data for its once-a-month injectable [for weight-loss]” in the back half of 2024.Note that Bristol-Myers and Karuna Therapeutics deal is subject to customary closing conditions, including regulatory and shareholders’ approval.More By This Author:Exploring New Investment Avenues Beyond Monero And Cardano For 2024 Crypto Companies Bolster Political Donations It’s Now Time To ‘Short’ Nvidia Stock: UBS Chart Analysts
