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Sarepta Rises 5.3%, Helping XBI’s Small-Cap Stocks

Peter Neil

XBI Rises amid a Flat Market

(Continued from Prior Part)

XBI small-caps muted by large and mid-cap stocks

The small-cap (small capitalization) stocks of the SPDR S&P Biotech ETF (XBI) gained 0.5% on November 17, 2015. XBI’s small-cap stocks underperformed its large-caps, its mid-caps, and XBI itself. However, the small-cap stocks outperformed the SPDR S&P 500 ETF (SPY), which gave a return of -0.05%.

As of November 17, 2015, XBI has 60 small-cap stocks in its portfolio with a market capitalization ranging from $300 million to $2 billion. Small-cap stocks account for ~57.8% of XBI’s portfolio. Out of 60 stocks, 22 ended up in the red and 38 gave positive returns.

XBI’s small-cap stocks include Amicus Therapeutics (FOLD), AMAG Pharmaceuticals (AMAG), and Merrimack Pharmaceuticals (MACK), which gave returns of -6.8%, 4.5%, and 4.7%, respectively.

The above graph reflects the collective performance of XBI’s small-cap stocks in comparison with XBI and SPY. Since the beginning of November 2015, XBI’s small-cap stocks have given a return of 3%, while XBI returned 3.3% and SPY returned -1.2%. The small-caps underperformed XBI but outperformed SPY.

Sarepta announces positive data for eteplirsen, gains 5.3%

Sarepta Therapeutics (SRPT) gained 5.3% on positive data for the drug eteplirsen.

As per its press release, SRPT announced, “The Annals of Neurology published online positive efficacy and safety results from a Phase IIb long-term open-label extension study of eteplirsen in patients with Duchenne muscular dystrophy (or DMD) amenable to exon 51 skipping. The study found that at three years of treatment, patients experienced a slower rate of disease progression when compared to untreated matched historical controls and the investigational drug continued to be well-tolerated.”

SRPT closed at $27.3 and was trading below its 50- and 100-day moving averages. SRPT witnessed high trading volumes, with ~1.8 million shares being traded as compared to its five-day average trading volume of ~884,000 shares per day.

SRPT has a book value of $2.94. With its current price, the stock is trading at a price-to-book value (or PBV) of 9.30x. SRPT has a weight of 1.4% in XBI’s portfolio.

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