Large-cap stocks struggle
Large-cap biotech stocks struggled during the week ending March 18, 2016. The large-cap stocks within the iShares Nasdaq Biotechnology ETF (IBB) suffered the most, falling 3.9% during the week. On the other hand, the large-cap stocks within the iShares US Medical Devices ETF (IHI) performed the best but still fell 0.3%. In general, the underperformance of the large-cap biotech stocks was attributed to profit-booking and selling pressure.
The above graph reflects the performances of large-cap stocks on a week-over-week basis in comparison with the SPDR S&P 500 ETF (SPY). In the past three weeks, SPY has outperformed the biotech ETFs with a return of 4.7%. IHI has risen 2.6%, while IBB has been the worst performer, falling 3.9% during the same period.
BioMarin tumbles 8% during the week
BioMarin Pharmaceutical (BMRN) was the most affected stock among the large caps, falling 8.3% for the week ending March 18. BioMarin Pharmaceutical presented at the Barclays Global Healthcare Conference, which was held in Miami on March 15–17, 2016. The company discussed its pipeline products, clinical trials, and strategies to achieve the goal of breaking even in 2017. BioMarin Pharmaceutical also discussed the filing of pegvaliase and expects some revenue from it in 2017.
BioMarin Pharmaceutical’s stock closed at $80.94 on March 18 and was trading below its 20-day moving average. On a year-to-date basis, the stock has fallen 22.8%. During the week, it recorded an average trading volume of 1.9 million shares per day. BMRN has a book value of $14.86 per share. With its current price, the stock is trading at a PBV (price-to-book-value) ratio of ~5.5x. Its peers Vertex Pharmaceuticals (VRTX), Alexion Pharmaceuticals (ALXN), and Regeneron Pharmaceuticals (REGN) are trading at PBV ratios of ~21.6x, 3.5x, and 10.4x, respectively. BMRN has a weight of ~2.2% in IBB’s portfolio.