In September Biotech stocks got hammered. Most market participants blamed the massive decline on Democratic Presidential candidate Hillary Clinton. On September 21, Clinton tweeted "Price gouging like this in the specialty drug market is outrageous. Tomorrow I'll lay out a plan to take it on." Clinton was referring to a drug called Daraprim, a 65-year-old drug, which recently saw its price increase from $13.50 per pill to $750.
While there are arguments for and against why Daraprim and other drugs increase in price, an industry-wide reform on how prices are set would likely hurt nearly every company in the biotech space. And that was what Clinton essentially proposed last month. With uncertainty surrounding the industry, the NASDAQ Biotechnology Index (NBI) fell by more than 15% just in September compared to a decline of just 4.4% for the S&P 500 during the month. Continue reading "6 Ways To Play The Biotech Industry Moving Forward"→
The biotechnology sector has witnessed unprecedented growth that has left all major indices far behind in both annual and cumulative performance over the past decade and more notably 5 years. Using the iShares NASDAQ Biotechnology Index (IBB) and SPDR S&P Biotech (XBI) as proxies, these ETFs have posted annual returns of greater than 30% over the past 5 years while more than quadrupling returns on a cumulative basis over the past decade. It is noteworthy to point out that both IBB and XBI have risen to all-time highs recently while IBB broke the $400 per share barrier as well.
A novel way to play the biotechnology cohort has entered into the ETF universe via BioShares™ Biotechnology Products (BBP) ETF. BBP offers a pure biotech play with no holdings in the generic, specialty pharma, life science tools, medical device, diagnostic or other healthcare companies. Thus this ETF focuses solely on the biotechnology cohort with at least one FDA approved product in its portfolio. Continue reading "A Newly Issued Pure Biotech ETF Worth Considering"→
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