Shareholders of the Swiss pharma company, Roche Holding (OTCX: RHHBY) have been bracing for impact in anticipation of a sharp movement in either direction. The stock has been trading close to the $41 and $43 range for the last two months, with hardly any deviation from this bracket. Its price shifts in recent days, and even hours, appear to show a continuation of this stability.
Anticipation toward a Roche Holding Price Boost
One reason as to why the market is closely watching RHHBY is because of a recent update, which could potentially be significant for its share price. The company recently engaged in a $650 million transaction with Jemincare, for the acquisition of a crucial prostrate cancer drug. Of this $60 million will be paid upfront, whereas the remaining $590 million will be paid at subsequent milestones. Considering that Roche’s cash and equivalents presently stand at $4.67 billion, the deal is well within the company’s affordability range.
The collaboration is one that is highly promising, as it brings together the top minds in prostate cancer research to develop new treatment options for advanced forms of cancer. As subsequent milestones are achieved, and the treatment approaches closer to commercialization, RHHBY will continue to see price spikes.
Implications for RHHBY valuation and price
The news is clearly big for all those holding, or considering to buy RHHBY. Prostrate cancer remains to be one of the most common forms of cancer within middle-aged men. The closer the treatment is pushed towards successful commercialization, the greater the intrinsic value for RHHBY is likely to surge. What would follow through is a price rise in accordance.
However, it is important to keep in mind the risks associated with betting on unclear outcomes. Negative updates about the candidates’ progress would likely result in price plummets, in order to correct the market’s standing. This is likely a cause of shareholder hesitation, which is presently preventing price hikes from being sustained.
RHHBY is a stock to keep close watch of. Its sharp climbs are immediately followed by dips of an equal magnitude. This indicates how divided the market seems to be regarding its future outlook. As more information continues to flow through, in regards to its prostrate cancer treatment, more certainty is likely to set in. This would ease ascertaining the direction RHHBY is likely to take.