As shares of biopharmaceutical company Gilead Sciences Inc. (GILD) continue to soar on news regarding the approval of a CAR-T treatment from Novartis AG (NVS) on Tuesday and Gilead’s acquisition of Kite Pharma Inc. (KITE) on Monday, one team of analysts finds the mixed reaction in pharma stocks rather puzzling.

Morgan Stanley’s Matthew Harrison and team indicate that while a bump in Foster City, Calif.-based Gilead’s shares following its $12 billion acquisition of Kite Pharma was expected due to investor speculation regarding increased strategic interest in the CAR-T space, the mixed reaction in stocks following Novartis’ approval may be unwarranted.

Shares Up on CAR-T Approval

Investors sent Juno Therapeutics Inc. (JUNO) falling on Tuesday, recovering 4.8% as of Thursday afternoon at $42.22 per share and reflecting a 37.3% rally this week. Gilead continues to surge after facing no pullback on Tuesday, up 2.3% on Thursday at $83.07 per share and reflecting a 12.5% jump this week. Biotechnology company Bluebird Bio Inc. (BLUE) has rallied more than 26% this week, up 10% on Thursday at $123.70 per share. (See also: Juno Stock Continues Breakout After Gilead Buys Kite.)

“Novartis outcomes-based pricing is a slight negative to the group, esp. for indications where responses are low (like DLBCL [diffuse large B-cell lymphoma]). Thus, it makes sense that JUNO saw some pressure in light of the sig. move higher this week and BLUE closed the gap with JUNO as BCMA response rates high,” wrote Harrison, speaking to B-cell maturation antigen response rates.

The analysts reiterated their perspective that initial DLBCL sales in 2018 will likely drive street sentiment for Gilead, Novartis and its peers. “We expect near-term volatility to continue as sentiment swings, but do not see greater clarity until 2018,” wrote the Morgan Stanley analysts. (See also: Why Gilead's Acquisition of Kite Is Not Enough.)

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.