Thursday, December 15, 2005

Hit #70

Abgenix (ABGX) is being acquired by Amgen for around $2.2 billion in an all-cash deal. This offer, of $22.5/share represents a premium of 53% over my average cost of $14.74/share.

In a post a few months ago, I had placed biotech as the best sector to bet on takeovers. Since then a number of the smaller biotechs have gotten expensive, since a takeover premium is now built into them following a string of deals. There are still attractive small biotech players, but you have to pick extremely carefully now.

An opportunity arising out of today's buyout is Imclone (IMCL). It has been rumored to be a target for a while and with this deal faces strong competition. The potential for takeover is probably what led to the stock to recover today after the initial slump. Imclone is attractive at its current price - I will be looking to open a position soon.

While on biotechs, I recently opened a small position in Allos Therapeutics (ALTH). I have also added Noven (NOVN), Enzon (ENZN) and Rigel (RIGL) to my watchlist. Most of these are speculative in nature.

Previous hit - Visual Networks (#69)


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