Galapagos Has Peaked, Nowhere To Go But Down

Galapagos announced today a large investment and a 10-year deal with Gilead $GILD. The stock gapped due to Gilead buying 10% of Galapagos at $158/share. However, when stocks gap up on investments at a premium price, they almost always fall (see MGI, ARWR)

An analyst at Raymond James agrees, saying he believes GLPG stock has now fully realized his price target by achieving his core investment thesis.

As terms of the deal, GILD has promised not to increase their stake in Galapagos for another 10 years, so a buyout is off the table