Small Gains for Health Care Stocks

Health care stocks were edging higher, with the NYSE Health Care Index rising nearly 0.2% in recent trade while the shares of health care companies in the S&P 500 also were up just over 0.2% as a group. The Nasdaq Biotechnology index was climbing about 0.7%.

Among health care stocks moving on news:

(+) Galapagos (GLPG) jumped 17% after US drugmaker Gilead Sciences (GILD) agreed to pay $5.05 billion to the Belgian biotechnology firm in exchange for a 10-year global collaboration agreement and an exclusive product license to commercialize all current and future programs in all countries outside Europe. Galapagos will receive $3.95 billion as an upfront payment with Gilead using the remaining $1.1 billion to buy Galapagos shares at 140.59 euros apiece, or 20% above their 30-day, volume-weighted average price.

In other sector news:

(+) Omnicell (OMCL) rose 9% after Monday refuting a report about the automated medication dispensing company issued last week by short-seller Glasshouse Research alleging Omnicell had resorted to “accounting gimmicks” and may need to restate its financial results after prematurely recognizing revenue. “Our revenue recognition policies and controls are carefully and thoughtfully applied and are intended to prevent premature revenue recognition,” the company said in a statement.

(-) Teva Pharmaceutical (TEVA) fell 7% after Morgan Stanley lowered its investment recommendation to underweight from equal weight previously and cut its price target on the drugmaker’s stock by $10 to $6 a share, citing its litigation risks in the nation’s opioid crisis.

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