Bristol - Myers buyout of Medarex

Shares in Human Genome Sciences (HGSI) rocketed up on news that it had received promising results for its lupus drug. Suddenly, the successes -- and potential successes -- of the biotech industry are in the spotlight again.

The heated-up biotech sector got another boost yesterday when Bristol-Myers Squibb (BMY) said it would buy Medarex (MEDX) for $16 a share, about double its trading price before the offer was made. It is hard to imagine why Bristol would pay such a huge premium, which puts the price of Medarex at $2.4 billion.