Boring news is bad news in biotech
Spare a thought for Dan Faga and Ben Hickey, the latest additions to the C-suite at Mirati Therapeutics. The Monday press release announcing their hiring called them “accomplished executives with proven expertise,” and then it sent Mirati’s share price down about 10%.
That’s not a referendum on each person’s talents but rather a market inference: If Mirati is hiring leaders for the long term, it’s probably not in the midst of a buyout negotiation. And if there’s no imminent takeout, then the company can’t be worth its previously rosy valuation.
As STAT’s Adam Feuerstein points out, the Mirati mini-story is illustrative for the state of biotech in 2020. The sector’s late-year surge was driven in part by an expectation of high-dollar M&A, which means a lot of companies have buyouts priced into their valuations. And thus when companies do quotidian company stuff, like hiring executives or attending conferences, their stock prices can only go in one direction.
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That’s not a referendum on each person’s talents but rather a market inference: If Mirati is hiring leaders for the long term, it’s probably not in the midst of a buyout negotiation. And if there’s no imminent takeout, then the company can’t be worth its previously rosy valuation.
As STAT’s Adam Feuerstein points out, the Mirati mini-story is illustrative for the state of biotech in 2020. The sector’s late-year surge was driven in part by an expectation of high-dollar M&A, which means a lot of companies have buyouts priced into their valuations. And thus when companies do quotidian company stuff, like hiring executives or attending conferences, their stock prices can only go in one direction.
Read more.
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