Reviewing mid-caps for the week
Mid-cap stocks had a mixed first week of April. Mid-caps of the iShares Nasdaq Biotechnology ETF (IBB) and the SPDR S&P Biotech ETF (XBI) were positive with returns of 5.5%, and 5.4%, respectively. Mid-cap stocks of the Healthcare Select Sector SPDR ETF (XLV) and the iShares US Medical Devices ETF (IHI) fell during the week. They returned -1.3% and 0.8%, respectively.
The above graph reflects the performance of mid-cap stocks of several biotechnology ETFs. The graph compares them to the SPDR S&P 500 ETF (SPY) on a week-over-week basis.
Intercept rose 19%
Intercept Pharmaceuticals (ICPT) rose 19.6% for the week ended April 8, 2016. In a company press release, the company said that “the U.S. Food and Drug Administration ([or] FDA)’s Gastrointestinal Drugs Advisory Committee voted 17 to 0 to recommend accelerated approval of Ocaliva (obeticholic acid) for the treatment of patients with primary biliary cirrhosis, recently renamed primary biliary cholangitis ([or] PBC).” The press release went on to say, “The target date for the FDA to take action under the Prescription Drug User Fee Act ([or] PDUFA) is May 29, 2016. The FDA is not bound by the Advisory Committee’s guidance, but takes its advice into consideration when reviewing investigational medicines. If approved, Ocaliva would be the first new treatment for PBC in nearly 20 years.”
Intercept Pharmaceuticals closed at $156.36. It was trading above its 20-day and 100-day moving averages. Year-to-date, the stock has risen 4.7% compared to peers such as Acadia Pharmaceuticals (ACAD), Anacor Pharmaceuticals (ANAC), and Horizon Pharma (HZNP). These companies have year-to-date returns of -10.9%, -39.9%, and -13.2%, respectively.
Intercept Pharmaceuticals’ relative strength index is 70. That indicates the stock has moved into overbought territory temporarily. It has a book value of $24.69 per share. With its current price, it’s trading at a price-to-book value of ~6.3x. Intercept Pharmaceuticals has a weight of 0.6% in IBB and a weight of 1.8% in XBI.