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Biotech’s Latest Mergers and Acquisitions Means Huge Gains Ahead

Biotech’s Latest Mergers and Acquisitions Means Huge Gains Ahead

When we come into this world, we are given an incredible gift: a lifetime.

That lifetime is yours and yours alone. You can do with it as you please. The possibilities are endless.

And it keeps getting better and better. U.S. life expectancy rates have surged in the past hundred years, rising from about 40 years to about 78 years in 2019.

Furthermore, scientists estimate that world life expectancy will rise to about 94 years by 2050. Just imagine what you can do with nearly a century of time at your disposal!

But these lifetime extensions don’t just materialize out of thin air. They require the miracle of modern science; the cutting-edge technology being researched right now around the world by leading health care companies.

At the heart of this scientific movement to improve the quality of human life are biotechnology firms.

Right now, these companies are developing ways to 3D print human organs for transplant. They are deconstructing viruses to use them in the fight against cancer.

They are probing the depths of the human mind to develop cures for Alzheimer’s, Parkinson’s, fibromyalgia and other debilitating ailments.

They are also developing new strains of grain, corn and other crops to resist harsh climates and diseases.

As the human lifespan increases, demand for these products and advancements will also rise. Analysts at expect the total market value for biotechnology and pharmaceuticals to surge 40% from $176.3 billion in 2018 to $247.2 billion by 2024.

That’s a hefty chunk of change. Some of it could be yours by investing in the biotechnology sector … giving you piece of mind to better enjoy your doubled lifespan.

And you can get started today with the SPDR S&P Biotech ETF (NYSE: XBI).

Investing in the Biotech Boom

Biotech stocks have been red-hot in the past three months. The SPDR S&P Biotech exchange-traded fund (ETF) is up more than 34% since its pre-Christmas lows.

Part of this renewed interest in biotechs stems from gains in the broader market. As the market rallies, investors are more willing to invest in riskier opportunities.

And the market has been in rally mode, with the S&P 500 Index up nearly 18% during this period. These gains have given investors confidence, and the biotechnology sector has benefited greatly.

The other short-term driver for the biotech sector has been mergers and acquisitions (M&A). Several blockbuster deals have happened so far this year.

In January, Bristol-Myers Squibb acquired Celgene for $74 billion.

Eli Lilly bought Loxo Oncology for $8 billion in cash.

And this past week, Roche Holding paid $4.8 billion for gene therapy company Spark Therapeutics.

That’s more than $86 billion in M&A activity in the first quarter of 2019 so far.

To see the real scope of biotech M&A activity, however, we need to put this year’s dollar figure in perspective.

In 2017, biotech M&A deals reached a total of just $79 billion. Last year, that figured surged to $125 billion.

Given this data, it’s hard not to expect that 2019 will see even more M&A activity. And that means bigger potential gains from investing now.

Grab XBI at a Discount

This is the perfect time to consider adding XBI to your portfolio.

While the ETF is up more than 34% in the past three months, XBI took a severe hit this week when Food and Drug Administration Commissioner Scott Gottlieb announced his resignation.

Gottlieb was considered a boon for the biotech industry. But the sharp pullback in XBI on the news is overdone.

Currently, XBI is down about 8% from its Monday highs. This overreaction has the ETF trading at a discount relative to the sector’s potential gains from M&A activity alone.

XBI Bitotech ETF March 2019

Remember, these biotech companies hold the future of the human race in their hands. And they will help extend that precious gift of a lifetime beyond our wildest expectations.

It’s time you took a serious look at tapping into that wealth of potential.

Until next time, good trading!


Joseph Hargett

Research Analyst, Banyan Hill Publishing

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