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Ultragenyx: A Top Loser in the Biotechnology Subgroup

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IBB’s biotechnology and pharmaceutical subgroup fell heavily

The issue of price control on specialty drugs resurfaced again. There were talks that Democrats will hold a debate on the biotech pricing issue. This lead to another sell-off in biotech stocks. The iShares Nasdaq Biotechnology ETF (IBB) fell by 3.2% while the SPDR S&P 500 ETF (SPY) fell by 0.63% on October 13, 2015.

The pharmaceutical subgroup led IBB’s fall. It fell by -4%. Biotechnology followed with a return of -3.5%. Holding companies returned -3.4%, healthcare products returned -2.6%, and the commercial services subgroup returned -1.5%. However, the average return for the trailing five-day period stood at -1.8%, -1.7%, -2.3%, -0.51%, and 0.47%, respectively.

The above graph shows the performance IBB’s different subgroups compared to IBB and SPY as of October 13, 2015.

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Ultragenyx was the top loser

Ultragenyx Pharmaceutical (RARE) fell by 8.2% due to profit-booking. It had a high trading volume of ~700,000 shares—compared to the five-day average trading volume of ~517,000 shares per day. The stock closed at $86.99. It was trading below the 20-day, 50-day, and 100-day moving averages. However, according to the press release on October 13, Ultragenyx “announced positive interim data on the acute effects of the investigational treatment UX007 (triheptanoin) at the end of the initial 24-week treatment period of the Phase 2 study in long-chain fatty acid oxidation disorder (LC-FAOD) patients.” The press release also said that these data are preliminary. They will require more time for proper evaluation at the 78-week time point. This didn’t excite investors much. Ultragenyx has a weight of 0.66% in IBB’s portfolio.

The other stocks that fell were PTC Therapeutics (PTCT) and Immunogen (IMGN). They returned -7.0% and -5.2%, respectively.

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