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Healthcare and Pharmaceuticals Prevail in Stable Market Conditions

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Healthcare and pharmaceuticals outshine

The iShares NASDAQ Biotechnology Index ETF (IBB) rose 3.13% and outperformed the broader market index. The SPDR S&P 500 ETF Trust (SPY) was flat with 0.07% gains for the week ending July 31, 2015. The rise in IBB was lead by the collective positive performance across subgroups. The healthcare products sector and the pharmaceuticals sector rose the most with 2.42% and 2.16%, respectively. Although the commercial services sector rose 2.24%, it has the lowest weight of 0.09% in the ETF. As a result, it didn’t have much of an impact on the fund. The biotechnology sector returned 1.98% for the same period.

The above graph shows the performance of IBB’s subgroups compared to IBB and SPY. The healthcare sector and the pharmaceutical sector underperformed IBB, but outperformed the broader index SPY for the week ending July 31, 2015.

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Radius Health and Alkermes outperform

Within the pharmaceuticals subgroup, Radius Health (RDUS) outperformed the other subgroups with a return of 7.62% for the week ending July 31, 2015. The stock fell on the news that the public offering of common stock was fully subscribed. Alkermes (ALKS) rose 5.75% as it declared its 2Q15 results on July 30, 2015. According to the company’s press release, it reported revenue of $151.4 million and a net loss of $46.1 million. Although the revenue fell, the stock rose on the news of the commercial launch of the drug ARISTADA.

Within the healthcare products sector, Qiagen NV (QGEN) rose 4.06% as it announced its 2Q15 results. According to the company’s press release, its adjusted sales revenue stood at $319.5 million. The stock rose as the results outperformed Wall Street’s expectations. Shire (SHPG) returned 3.44%.

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