Akebia Therapeutics, a Cambridge, Mass.-based drugmaker that went public in March, also gained after analysts initiated coverage of the stock with price targets as high as $90. The shares closed Friday at $16.86.
Akebia is developing a medicine called AKB-6548 for anemia due to chronic kidney disease, what Nomura analyst M. Ian Somaiya calls a $6 billion global market opportunity. Somaiya initiated coverage Monday with a "buy" rating and price target of $39, while Credit Suisse's Ravi Mehrotra pegged his target at $25, with an "outperform" rating. Morgan Stanley's David Friedman set a $90 price target, noting he sees more than $2 billion in worldwide sales potential in the drug's first indications.Clinical trial data are expected in the fourth quarter.
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Even companies with negative news participated in the gains. Acorda Therapeutics rose 4.6 percent despite news Monday that a study of its drug for stroke would be delayed. The stock had been upgraded at FBR Capital Markets to "outperform."
The larger-cap companies, too, initially rallied, with Biogen regaining more than 3 percent, and Celgene and Gilead more than 2 percent. The EASL (European Association for the Study of the Liver) conference wrapped in London over the weekend, and despite strong data from Merck, AbbVie and others, Gilead remains the hepatitis C darling.
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"Gilead's data remains impressive and the simplicity of their regimen will enable it to be the dominant player in the space," Credit Suisse's Mehrotra wrote Sunday in a note.
Nomura's Somaiya points out Gilead is trading at a discount to the S&P, suggesting "current levels represent an even more compelling buying opportunity."
—By CNBC's Meg Tirrell.
(UPDATE: This story was updated from the original to reflect the movement in the stocks as well as to provide additional information about analysts' price targets for Akebia.)