IBB Falls as Biotechs Bear the Weight of Global Pressures
IBB’s large-caps look volatile
The large-cap (large capitalization) stocks of the iShares Nasdaq Biotechnology ETF (IBB) fell 1.6% on December 7, 2015. They outperformed IBB itself, which fell by 2.3%. However, IBB’s large-cap stocks underperformed the SPDR S&P 500 ETF (SPY), which returned -0.6%.
Out of the 15 large-cap stocks that IBB holds in its portfolio, 14 gave negative returns, and only one gave a positive return. Large-cap stocks account for ~69.3% of IBB’s portfolio. Some large-cap stocks that fell on the day include Endo International (ENDP), Vertex Pharmaceuticals (VRTX), and Alkermes (ALKS), which lost 4.9%, 2.7%, and 2.7%, respectively.
The above graph reflects the daily returns of IBB’s large-cap stocks, IBB, and SPY on a day-to-day basis. Since the beginning of December 2015, SPY has outperformed IBB and IBB’s large-cap stocks. During this period, IBB large-caps have returned -1.8%, IBB has returned -2.9%, and SPY has returned -0.1%.
Alexion presents PNH data
Alexion Pharmaceuticals (ALXN) rose 2.0% on the news of its PNH data. As per its press release, ALXN announced, “Researchers presented data from the International Paroxysmal Nocturnal Hemoglobinuria (or PNH) Registry that advance the understanding of PNH and provide important information for the medical community on the long-term management of the disease, including the progression of symptoms in untreated patients with PNH and the continued benefits of ongoing Soliris® (eculizumab) treatment regardless of transfusion history.”
The PNH data was presented at the 57th annual meeting of the American Society of Hematology in Orlando, Florida.
ALXN closed at $179.15 and was trading above its 20-, 50-, and 100-day moving averages on December 7, 2015. ALXN has a year-to-date (or YTD) return of -3.2%. ALXN’s trailing-12-month price-to-earnings multiple stood at 145.65x.
The book value of ALXN is $36.52 per share. With its current price, the stock is trading at a price-to-book value of 4.91x compared to the fund’s industry average of 11.93x. ALXN has a weight of ~4.2% in IBB’s portfolio.
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