What Happened?
A number of stocks jumped in the afternoon session after news of a new government prescription drug policy and a landmark deal with Pfizer eased investor concerns over stricter pricing regulations.
The pharmaceutical and biotech sectors rallied for a second consecutive day following the announcement of a direct-to-consumer prescription drug selling website. A key driver for the optimism is a deal between Pfizer and the administration, allowing the company to avoid potential tariffs by reducing drug prices. This outcome is seen as a relief for the industry, which had braced for more severe measures. The move has reduced uncertainty in the sector, with other major players like Eli Lilly reportedly in negotiations for a similar agreement, signaling a potentially favorable new landscape for drugmakers.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Health Insurance Providers company Centene (NYSE: CNC) jumped 3.3%. Is now the time to buy Centene? Access our full analysis report here, it’s free.
- Medical Devices & Supplies - Imaging, Diagnostics company QuidelOrtho (NASDAQ: QDEL) jumped 2.6%. Is now the time to buy QuidelOrtho? Access our full analysis report here, it’s free.
- Patient Monitoring company iRhythm (NASDAQ: IRTC) jumped 2.8%. Is now the time to buy iRhythm? Access our full analysis report here, it’s free.
- Research Tools & Consumables company Bio-Techne (NASDAQ: TECH) jumped 3.6%. Is now the time to buy Bio-Techne? Access our full analysis report here, it’s free.
Zooming In On Bio-Techne (TECH)
Bio-Techne’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 5.3% as reports revealed a potential drug-pricing agreement between the White House and the pharmaceutical industry.
The Trump administration is advancing its “Most Favored Nation” initiative, which aims to lower prescription drug costs for Americans. This policy would tie the prices of medications in the U.S. to the lowest costs paid by other wealthy nations. As part of this push, Pfizer has reportedly entered into an agreement to voluntarily sell its medications through Medicaid at these reduced prices. The move comes as the administration intensifies pressure on drugmakers to make prices more affordable. While pricing controls can often be a headwind, the market's positive reaction suggests that investors may see this voluntary agreement as a way to resolve regulatory uncertainty, providing a clearer path forward for the industry.
Bio-Techne is down 13.6% since the beginning of the year, and at $61.83 per share, it is trading 21.5% below its 52-week high of $78.75 from January 2025. Investors who bought $1,000 worth of Bio-Techne’s shares 5 years ago would now be looking at an investment worth $1,001.
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