Synageva BioPharma: Another Winning Lottery Ticket For Investors

Investors who purchased the stock of Synageva BioPharma a few years ago for a few dollars must be cheering today, as they will book astronomical gains if they ring the register. Synageva is in the business of developing and commercializing therapeutic products for patients with rare diseases. Its stock was trading at $205 on Wednesday morning, following a takeover bid by Alexion Pharmaceuticals. That’s a 114% gain from the previous closing. The stocks of other rare therapeutic biotech companies rallied in sympathy. Investing in small biotechnology stocks is similar to buying lottery tickets. Very few of them manage to develop products that pass the FDA and market test, turning into large companies or being sold at a big market premium. The rest burn cash, and end up trading in pennies, after several rounds of refinancing. Synageva and Alexion’s Key Metrics