Public trading strategy
GSK just paid $10.6B for a cancer biotech — the M&A frenzy is lifting smaller dr
Thesis
Major pharmaceutical companies are facing a 'patent cliff,' meaning their top-selling drugs will soon lose exclusive rights. To avoid losing revenue, they are rapidly buying up smaller biotech companies with promising new drugs. GSK's massive purchase of Nuvalent signals that this buying frenzy is accelerating. This makes the entire biotech sector highly attractive, as investors will buy up smaller companies hoping they will be the next acquisition target.
Strategy approach
Build a rule-based strategy that enters long IBB or XBI on the daily timeframe when the price closes above the 20-day moving average and the 14-day RSI is between 45 and 65, with a 15-day max hold and a 2.5% trailing stop.