The pharmaceutical and biotechnology sectors have witnessed a significant increase in deal values throughout 2023, with a 35% rise in pharma and a 45% increase in biotech deal values. This surge comes as major drugmakers grapple with looming patent cliffs and regulatory challenges that threaten their revenue streams. Despite a general decline in global M&A activity, which saw a drop of approximately 17% to $2.87 trillion, the lowest in a decade, pharma and biotech mergers and acquisitions have been a notable exception. The number of pharma deals decreased slightly from 778 to 678, yet the total deal value jumped from $98.5 billion to $135.5 billion. Biotech deals also saw an uptick in value, with 1,078 deals amounting to $122.2 billion, compared to 1,088 deals worth $84.2 billion in the previous year. Drugmakers such as Bristol Myers Squibb (BMY, Financial), Pfizer (PFE, Financial), Merck (MRK, Financial), AstraZeneca (AZN, Financial), and Eli Lilly (LLY, Financial) are among those affected by Medicare drug price negotiations set for 2026.
In other news, UnitedHealth (UNH, Financial) has come under scrutiny for using a confidential set of rules to deny Medicare coverage for rehabilitation care to specific groups of severely ill patients. This denial of coverage, which was based on criteria not disclosed to patients or their doctors, affected groups including those in nursing homes or with cognitive impairments. The company, a major player in the Medicare Advantage market, has since advised its clinical reviewers to use their judgment in coverage decisions.
The geopolitical tension between Venezuela and Guyana over the Essequibo territory has impacted Hess Corp. (HES, Financial), which saw its stock drop by 2.1% after Venezuelan President Nicholas Maduro deployed soldiers along the coast. This move comes despite an earlier agreement between the two countries to avoid the use of force over the disputed oil-rich region.
In the technology sector, Bilibili (BILI, Financial) shares rose over 6% as investor sentiment improved following China's attempts to alleviate concerns about the recent crackdown on the video game industry. The Chinese regulator has sought public comment on the rules and approved 105 domestic games, including titles from Tencent (TCEHY, Financial) and NetEase (NTES, Financial).
Marathon Digital (MARA, Financial), a major crypto miner, saw its stock poised to end its 11-session rally, which was the longest consecutive gain among its peers during the recent crypto runup. The stock slumped 8.9%, marking its most significant decline since early December.
Vaccine developers like Novavax (NVAX, Financial) have experienced a slump in their shares this year as the urgency of the COVID-19 pandemic wanes. Novavax, in particular, saw its stock decline by approximately 50% in 2023, with a recent 52-week low contributing to a quarter-to-date drop of around 32%.
The Russell 2000 (IWM, Financial) is on track to record one of its most significant two-month gains in history, with a current increase of about 24.3%. This performance is indicative of the broader market's resilience and potential for continued growth.
Cathie Wood's ARK Next Generation Internet ETF (ARKW, Financial) has made significant portfolio adjustments, selling its remaining Grayscale Bitcoin Trust (GBTC) shares and buying into ProShares Bitcoin Strategy ETF (BITO, Financial) and ARK 21Shares Active Bitcoin Futures Strategy ETF (ARKA, Financial).
Wedbush Securities has expressed optimism for consumer internet platforms in 2024, with top picks including Amazon (AMZN, Financial), Meta (META, Financial), Booking (BKNG, Financial), and Uber (UBER, Financial). The analysts anticipate growth in digital ads and e-commerce, with Amazon's advertising revenue expected to outpace the industry.
Lastly, shares of Iovance (IOVA, Financial) rebounded 15% after a previous day's drop due to an FDA clinical hold on a Phase 2 lung cancer drug study. Mizuho has reiterated its buy rating on the stock, with a price target of $30.
