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XBI’s Mid Caps: Ionis Gives Update on Nusinersen Phase 2 Study

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XBI’s mid-cap stocks

The mid-cap stocks of the SPDR S&P Biotech ETF (XBI) rose 1% on April 20, 2016, and outperformed the SPDR S&P 500 ETF (SPY), which rose 0.1% on the day. Mid-cap stocks account for ~30% of XBI’s portfolio. As of April 20, 2016, XBI holds 18 mid-cap stocks in its portfolio. Among them, 13 stocks rose, and only five stocks fell from the previous day’s close.

The above graph reflects the daily changes of XBI’s mid-cap stocks as well as the SPDR S&P 500 ETF. Since the beginning of April, XBI’s mid-cap stocks have returned 10.9%, while SPY has returned 2.2%.

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Ionis Pharmaceuticals reports data update from nusinersen Phase 2 study

Ionis Pharmaceuticals (IONS) announced an update on its open-label Phase 2 clinical study of nusinersen in infants with spinal muscular atrophy (SMA). Ionis Pharmaceuticals reported that “there have been no new events, as defined by progression to permanent ventilation or death, in the study since December 2014 with continued increases in event-free survival, muscle function scores as well as achievement of new developmental milestones. Data showing increases in neuromuscular electrophysiology measurements were also reported. The latest analysis also demonstrates that no nusinersen-related safety or tolerability concerns have been identified.”

Ionis Pharmceuticals’ stock

Ionis Pharmaceuticals’ stock closed at $43.62 on April 20 and is trading above its 20-day moving average. On a year-to-date basis, IONS has fallen 29.6%. Analysts’ median target price for the stock is $52. Seven analysts have given IONS a “buy” recommendation, five analysts have given it a “hold” recommendation, and one analyst has given it a “sell” recommendation.

Ionis Pharmaceuticals’ book value is $1.67 per share. At its current price, the stock is trading at a PBV (price-to-book value) multiple of ~26.1x. Its peers Seattle Genetics (SGEN), United Therapeutics (UTHR), and Juno Therapeutics (JUNO) are trading at PBV multiples of 7.9x, 3.3x, and 3.1x, respectively. Ionis Pharmaceuticals has a weight of 1.6% in XBI’s portfolio.

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