(BNTX) Stock- Will Biotech Stocks’ Slide Become a Rout? June Holds the Key.
Crunch time has arrived for biotech stocks.
The leading exchange-traded funds that track the industry are down precipitously this spring. The
SPDR S&P Biotech ETF
(ticker: XBI) has fallen 29.9% from its Feb. 9 high, while the
iShares NASDAQ Biotechnology ETF
(IBB) has tumbled 16% from its own high, reached on Feb. 10. The
is up 5.2% over the same period.
Now, both of the ETFs have fallen to close to prices where they were before the rally that kicked off last fall. What happens next will determine whether they climb out of their hole, or the biotech slide turns into a rout. A cancer conference that starts in June could be critical.
The decline since February has been driven, in part, by an unusually large number of big-name disappointments for biotech companies.
Immunovant (IMVT), down 62.6% since the end of January, has lost the most ground among companies with market values of more than $1 billion held by either biotech ETF. The plunge came after management disclosed that it had paused dosing patients in trials of its experimental drug IMVT-1401, which is being tested as a treatment for myasthenia gravis, among other conditions. The company saw higher cholesterol levels in some patients who had received the drug.
(FGEN), meanwhile, has slumped 56.3% over that period after disclosing a major issue with data it had touted for years on an experimental drug called roxadustat.
Other big losers in the ETF portfolios include
(ACAD), down 55.8% after a rejection from the U.S. Food and Drug Administration; and
(INO), off 51.1% following news that the U.S. government pulled funding for a trial of its Covid-19 vaccine.
All told, 29 stocks with market values of $1 billion or more in the portfolios of at least one of the ETFs have fallen 40% or more since the end of January. The names getting slammed include
There have been some winners, too. A biotech called
(OCGN) has rallied 365% over the same period after announcing it had rights to develop and commercialize an Indian Covid-19 vaccine in the U.S.
More familiar names that have climbed substantially since the end of January include Covid-19 vaccine maker
((BNTX)), up 54.6%.
(RUBY) is up 96.7% after presenting positive cancer data.
Still, there has been more bad news than good. Of the biotechs with a market value of $1 billion or more in the portfolios of the ETFs, only eight have climbed by 40% or more since the end of January.
Biotech investors will now be looking towards the American Society of Clinical Oncology annual meeting, which begins June 4, and will bring a wave of clinical data from biotech firms. How those results look could determine the next steps for the indices, and the sector.
Companies across the biotech and pharmaceutical industries will be presenting data, including
(ALLO), and many others.
Abstracts from scientific papers to be presented at the conference will be released Wednesday.
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