Another Good Day for Biotech Stocks:Incyte(INCY), Martek(MATK) and XBI Clinical News and M&A Boost Biotechs

Biotech stocks continued their seasonal strength with many winners in the mid-cap sector. Our index of 33 mid-cap stocks was up 2.7% which is unusually strong. Leaders were Incyte (INCY), Martek Biosciences (MATK) and the ETF XBI which owns a position in large cap Genzyme (GENZ) up 2.3%. Reuters put out an article calling for more M&A activity in healthcare. Many analysts have forecasted increasing M&A activity in biotech as both large cap pharma and biotech needing to buy pipeline and technology from mid and small caps.Yesterday buy gabapentin 300mg uk Gilead (GILD) announced the purchase of Arresto Biosciences for $225M for experimental drugs in cancer and lung disease (idiopathic pulmonary fibrosis).

Healthcare sector ripe for more deals in 2011 | Reuters Incyte Pharmaceuticals (INCY $16.50) up 8.8%

The Company announced positive top -line results from their pivotal Phase III clinical trials of INC24 in patients with myelofibrosis (MF). MF is a blood cancer where abnormal bone marrow stem -cells are produced resulting in growth of connective tissue fibers. A double-blind, placebo controlled Phase II study of 306 patients was conducted under a Special Protocol Assessment Agreement. The response rate was 42% with high levels of statistical significance also achieved for secondary endpoints.An NDA is currently being prepared for a drug launch

Martek Biosciences(MATK $31.61) up 35%

Martek shares soared today on a buy-out offer from Dutch Group DSM, the worlds largest vitamin maker, for $1.1B in a diversification move. Martek has a leading position in healthy natural ingredients for the baby food market as well as health and wellness. The Company is a leader in fermentation technology and products derived from microalgae. Total product sales were $435M for the 12 mo. period ending Oct 31,2010 with earnings of 83 cents a share down from $1.22 a year earlier.

XBI $64.38 is up 2.35% at its 52 week high.

The ETF XBI owns 3.4% of MATK and other mid-cap biotechs that have been on “hit lists” as acquisition targets : Enzon(ENZN), Regeneron (REGN) and Vertex(VRTX). All of these stocks are up 2%+ today.

Genzyme (GENZ $71.28) up 2.34%

The Genzyme /Sanofi deal chat perked up today on renewed  speculation that GENZ is willing to talk to Sanofi-Aventis (SASY.PA) about the $69 ($18.5B) tender offer price extended to January 21,2011. No other offers have surfaced for the Company.  Genzyme has recently been selling off non-core businesses such as the sale of genetic testing and diagnostic businesses for $925M and $265M respectively. Trading volume in the January 70,72.5 and 75 call options picked up today.

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