April 6, 2015

A TRIO OF BIOTECH FAVORITES

By Jay Silverman

Our guest today is Jay Silverman, a leading biotechnology sector analyst and editor of The Medical Technology Stock Letter. He updates us on the acquisition of one of his long-standing recommendations, the impact of this deal on the biotech space, and a trio of additional ideas for long-term investors to consider.

Steven Halpern: Our guest today is Jay Silverman, biotechnology sector analyst and editor of The Medical Technology Stock Letter.  How are you doing today, Jay?

Jay Silverman: I’m great, Steve. Thanks a lot.

Steven Halpern: Well, first off, kudos are in order.  In previous conversations with MoneyShow, you’ve highlighted Pharmacyclics (PCYC) as one of your favorite biotech investments, and, in fact, have recommended the stock several times for our listeners at prices around $100 a share. Now the stock is about $250.  Could you update our listeners on the developments and what caused the sharp price increase?

Jay Silverman: Certainly.  It’s definitely been one of our longer-term recommendations. PCYC is being acquired by Abbvie (ABBV) as many people know for $261.25 and just today we received the merger documents or acquisition documents.

Investors will have the choice to get all cash payouts when the deal is completed or 58% cash and 42% in ABBV shares, which I think also is very attractive.  It’s a fixed price, so the combination will always equal $261.25 and it’s not dependent on the fluctuations in either PCYC and Abbvie share prices right now.

Steven Halpern: Now, I’m certain you’re happy to see such a significant price gains, but you also mentioned in the past you would hope to hold the stock for many years, so I assume you have some mixed feelings about the buyout?

Jay Silverman: I do, in a sense that we’ve been following this company for two or three years, or so, at the Letter and I’ve personally followed it for about six years and they did have a non-cancer opportunity at the company over time, which I thought could have doubled the stock back then, so yeah, there are some mixed feelings, but clearly it’s been one of our most successful recommendations, so we’re pretty happy.

Steven Halpern: Could you explain to our listeners how buyouts such as this will impact the overall sector and what your overall outlook on biotechnology is at the current time?

…read more or listen to the interview