Shares of Genzyme rose as much as 7 percent on Monday amid speculation the biotechnology company could be a takeover target after rival Biogen Idecput itself up for sale.
Genzyme shares were also helped by its release on Sunday of positive data for its experimental multiple sclerosis drug, which also pushed up shares of its German partner, Bayer.
"I think the share gain reflects both these things," said Christopher Raymond, an analyst at Robert W. Baird & Co. "There's a lot of speculation that Genzyme might be next, and I think they've got better growth prospects than Biogen Idec."
The American Stock Exchange Biotechnology index was up 1.9 percent in mid-morning trading, though shares of Amgen, the world's biggest biotechnology company and also considered by some a potential acquisition target, fell slightly.
"Genzyme and Amgen are, in our opinion, the only major biologics companies that could realistically be purchased if Biogen disappears," Mark Schoenebaum, an analyst at Bear Stearns, said in a research report. "Genzyme seems to make the most sense as a potential target for a major pharma company looking to bulk up its biologics capabilities."
Amgen has a market capitalization of $63 billion, compared with nearly $20 billion for Biogen and $18.8 billion for Genzyme.
Genzyme said Sunday that three-year data from a mid-stage trial of its experimental multiple sclerosis drug showed it to be very effective, but patients must be monitored on a monthly basis to avoid a potentially deadly side effect.
Biogen, which is wrestling with slowing growth for its flagship MS drug, said on Friday it was putting itself on the auction block.
Genzyme shares earlier rose as high as $76.90 and were up more than 5 percent as of 11:25 a.m. ET.
Biogen shares were up nearly 20 percent on Nasdaq.