Bloomberg Bloomberg via Getty Images

Compared to a 5% decline in the NASDAQ.

By Sy Mukherjee
May 6, 2016
May 06, 2016

Biotechnology stocks are continuing to struggle despite a brief rally in April, with major index funds such as the iShares NASDAQ Biotechnology Index (IBB) and the S&P Biotech ETF (XBI) down about 25% year-to-date. That’s compared to a 5.4% drop in the broader NASDAQ.

As of Friday’s closing bell, several flagship biotechs have seen shares fall anywhere from 6% to 16% since January 4, the first trading day of the year. Biogen biib is down 14%; Gilead gild and Celgene celg have both fallen 16.3%; while Amgen amgn has seen a more modest drop of 5.6%, in line with the broader NASDAQ decline.

Click here to subscribe to our new Brainstorm Health Daily Newsletter.

There are several theories for explaining the drops. One of the most common ones is that a series of negative headlines featuring biopharma players like Martin Shkreli and Valeant Pharmaceuticals vrx has tainted the industry-at-large, sending skittish investors into a defensive crouch. Persistent media and political focus on drug price hikes and Congressional inquiries into distribution models hasn’t helped, either.

Others argue that this may just be a natural correction for biotech stocks after a remarkable five-year bull run, which has been the greatest in the industry’s history.


Not all biotech shares have been floundering, however. After cratering earlier this year, shares of the gene-editing biotech Editas edit have been soaring since mid-March and are now up more than 65% on the year. The company had the first IPO of 2016.

AbbVie abbv , which manufactures the world’s best-selling drug, Humira, is up 5.5% year-to-date.


You May Like