Outside the Box: Drug prices may be rising, but you can buy biotech stocks at rock-bottom levels

You don’t usually get the chance to pick up the entire research-and-development arm of a major company for free.

But given the sharp declines in biotechnology stocks, with the iShares Nasdaq Biotechnology exchange traded fund (ETF) IBB, -0.90% and SPDR S&P Biotech ETF XBI, -1.48% recently down as much as 20%, these kinds of deals are popping up now.

You should take advantage of them.

Consider Gilead Sciences GILD, -0.31% and Celgene CELG, -0.24% for example. At recent prices of $70 and $75, they traded at market values that aren’t too far above the value of their operating businesses, according to discounted cash flow analysis by Jefferies biotech analyst Michael Yee and his team.

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