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BLUE Is IBB’s Worst-Performing Small-Cap on Disappointing Data

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IBB small-caps shed 3.8%

The small-cap (small capitalization) stocks of the iShares Nasdaq Biotechnology ETF (IBB) fell 3.8% on December 7, 2015, underperforming the SPDR S&P 500 ETF (SPY) and the IBB, which gave returns of -0.6% and -2.3%, respectively. Out of the 80 small-cap stocks in IBB’s portfolio, 71 gave negative returns and nine gave positive returns. IBB’s small-cap stocks account for ~11% of its portfolio.

The small-cap stocks that rose on the day were Sangamo Biosciences (SGMO) and Affymetrix (AFFX), which returned 6% and 1.6%, respectively. The worst performers of the day were bluebird bio (BLUE) and Agios Pharmaceuticals (AGIO), which fell 37.6% and 20.4%, respectively.

The above graph reflects the performances of IBB’s small-cap stocks, IBB, and SPY. Since the beginning of December 2015, IBB’s small-caps have given a return of -5.8%, IBB has given a return of -2.9%, and SPY has given a return of -0.1%.

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BLUE tanks 37.6%

On December 7, 2015, bluebird bio fell 37.6%. The stock fell after it announced disappointing clinical data for its BB305 treatment. In its press release, Blue announced “the presentation of new data from the ongoing HGB-205 and HGB-206 clinical studies evaluating its LentiGlobin BB305 product candidate in patients with beta-thalassemia major and severe sickle cell disease (SCD).”

According to the press release, the results showed the following:

  • Two patients with beta-thalassemia major with β0/βE genotype remain transfusion-independent for 23.4 and 20.1 months, respectively
  • Patient with severe sickle cell disease (or SCD) in HGB-205 study remains free of transfusions and complications from SCD for nine months and is producing 49 percent anti-sickling hemoglobin
  • Early safety data presented from patients with severe SCD treated in HGB-206 study

BLUE closed at $52.25 and was trading below its 20-, 50-, and 100-day moving averages. The stock witnessed a high trading volume, with ~10.1 million shares being traded. In comparison, its five-day average trading volume is ~1.6 million shares per day.

BLUE has a book value of $24.26. With its current price, the stock is trading at a price-to-book value of 2.15x. BLUE has a weight of ~0.45% in IBB’s portfolio.

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