18 Nov

Radius Falls by 11%, Hindering XBI’s Mid-Cap Stock Performance

WRITTEN BY Peter Neil

XBI’s mid-cap stocks rose by 1.1%

The mid-cap (middle capitalization) stocks of the SPDR S&P Biotech ETF (XBI) gave a return of 1.1% on November 17, 2015. XBI’s mid-cap stocks outperformed XBI and the SPDR S&P 500 ETF (SPY), which returned 0.75% and -0.05%, respectively.

As of November 17, 2015, XBI holds 27 mid-cap stocks with a market capitalization ranging from $2 billion to $10 billion. Out of the ETF’s 27 mid-cap stocks, 20 gave positive returns, while seven gave negative returns.

Radius Falls by 11%, Hindering XBI’s Mid-Cap Stock Performance

XBI’s mid-cap stocks account for ~27.3% of its portfolio. XBI’s mid-cap stocks include Medivation (MDVN), Juno Therapeutics (JUNO), and Anacor Pharmaceuticals (ANAC), which returned 4.2%, -0.65%, and 2.3%, respectively, on November 17.

The above graph reflects the collective performance of XBI’s mid-cap stocks in comparison with XBI and SPY. Since the beginning of November 2015, XBI’s mid-cap stocks have returned 6.9% as compared to XBI’s return of 3.3% and SPY’s return of -1.2%. Clearly, XBI’s mid-cap stocks have the upper-hand over XBI and SPY.

Radius down by 11% on delay of abaloparatide-SC in the US

Radius Health (RDUS) fell by 11.1% and closed at $61.51. The fall resulted in the stock’s trading below its 20-, 50-, and 100-day moving averages.

As per a company press release, RDUS announced, “Following the completion and reporting of the positive top-line results for the Phase 3 ACTIVE trial and the first six months of ACTIVExtend, Radius has now submitted the MAA for the investigational drug abaloparatide-SC in the EU.  The Company is now turning its focus to the completion of the work streams necessary for the submission of the New Drug Application (NDA) to the FDA (US Food and Drug Administration) for the investigational drug abaloparatide-SC.”

Investors were disappointed in the company’s announcement that it would submit an NDA only at the end of first quarter of 2016 in the United States. This resulted in the stock’s tanking.

RDUS has a book value of $11.41 per share. With its current price, the stock is trading at a price-to-book value (or PBV) of 5.39x. RDUS has a weight of 1.4% in XBI’s portfolio.

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