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How are IBB’s Subgroups Performing?

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IBB’s subgroups

The iShares Nasdaq Biotechnology ETF (IBB) gives good exposure to various industries in the biotechnology industry. As of October 19, 2015, IBB rose by ~0.5%. The SPDR S&P 500 ETF (SPY) remained flat. It rose marginally with a return of 0.05%. IBB closed at $315.94. It was trading above the 20-day moving average, but below the 50-day and 100-day moving averages.

IBB’s performance was driven by good performances from its biotechnology and pharmaceutical subgroups. They returned 0.9% and 0.8%, respectively. These two subgroups have a combined weight of ~97.5% of IBB’s portfolio. The other subgroups like commercial services gave a higher return of 1.8%. However, its impact on the ETF is very limited because the subgroup has only one holding.

The above graph shows the performance of IBB’s subgroups as of October 19, 2015. Out of the five subgroups, four subgroups were positive and one was in red.

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Achillion was the top performer

Achillion Pharmaceuticals (ACHN) rose by 5.5%. The stock rose as the company announced that “Alios Biopharma Inc., part of the Janssen Pharmaceutical Companies (Janssen) has initiated treatment in a Phase 2a clinical trial to evaluate the safety, pharmacokinetics and efficacy of AL-335, odalasvir (also known as ACH-3102), and simeprevir in treatment-naïve patients with genotype 1 chronic hepatitis C virus (HCV) infection.” As announced on May 19, 2015, Achillion granted Janssen an exclusive, worldwide license to develop and, with regulatory approval, commercialize HCV products and regimens containing one or more of Achillion’s HCV assets that include odalasvir (ACH-3102), ACH-3422, and sovaprevir.

Achillion closed at $7.94. It was trading just below the 20-day, 50-day, and 100-day moving average price of $8. With its current price, the stock is trading at a PBV (price-to-book value) ratio of 3.9x. Achillion has a weight of 0.16% in IBB’s portfolio.

Some of the other stocks within the biotechnology subgroup that performed well were Insmed (INSM), Geron (GERN), and Alder Biopharmaceuticals (ALDR). They returned 1.8%, 1.6%, and 3.7%, respectively.

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