How Wall Street Is Reacting To The Pharmacyclics Rumor

Oncothyreon Inc (USA) ONTY is up about 2.5 percent on Wednesday afternoon after a rumor of a possible move on Pharmacyclics, Inc. PCYC hit the wires. Pharmacyclics is up nearly 17 percent.

Adam Feuerstein (@adamfeuerstein), Sr. Columnist at TheStreet, tweeted a note on the news from Bernstein's trading desk.

Bernstein trading desk reaction to $PCYC takeout rumor. Skeptical. pic.twitter.com/SxiF83x0mh

— Adam Feuerstein (@adamfeuerstein) February 25, 2015

Leaving all comments on Bernstein’s spelling aside (because, in fact, Microsoft Word changes “sceptical” to “skeptical” automatically), a few things from the report can be highlighted:

• The firm is skeptical about Pharmacyclics being for sale.
• Valuation looks “a bit too pricey (…) In other words: you have a $1B asset generating $30B in biotech company valuation.”
• Although Ibrutinic could work in combo with PD-L1 in treating cancer, it was only tested on mice, so the hype is a little unjustified.

It seems like Deutsche Bank also believes the valuation is too high.

The firm recently cut Pharmacyclics’ stock rating to a Hold, following the steep increase in stock price.