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IBB’s Holdings Surge on Positive Market Sentiment

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IBB moves higher

On May 16, 2016, US markets moved higher on account of technology stocks and the rise in oil prices. The Dow Jones Industrial Average and the SPDR S&P 500 ETF (SPY) both gained 1%. The iShares Nasdaq Biotechnology ETF (IBB) outperformed the broader markets and moved up by 3.1%. The surge helped IBB to cut down its year-to-date losses. As of May 16, 2016, IBB’s year-to-date losses stood at 22.7%.

The above table shows the prices of IBB, SPY, some of IBB’s holdings, along with returns and moving averages on May 16, 2016. The iShares Nasdaq Biotechnology ETF closed at $261.67 and was trading below its 20-day moving average.

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IBB’s top performers on May 16

The top performers within IBB on May 16, 2016, were Anacor Pharmaceuticals (ANAC), Aegerion Pharmaceuticals (AEGR), and Vitae Pharmaceuticals (VTAE), which went up by 57.2%, 33.5%, and 17.1%, respectively. Anacor Pharmaceuticals moved up as Pfizer (PFE) acquired Anacor Pharmaceuticals for $5.2 billion. We’ll discuss the acquisition deal in the upcoming part of this series.

Aegerion stock gained during the trading hours, but the stock was down ~15% in the post-trading hours, as it reported 1Q16 losses. It reported 1Q16 revenues at $35.7 million as compared to $59.4 million in 1Q15. On a GAAP (generally accepted accounting principles) basis, it recorded a net loss of $65.6 million as compared to $15.8 million in 1Q15. It revised its full-year sales to be between $130 million to $150 million as against the earlier guidance of $160 million to $190 million. Vitae Pharmaceuticals rose on hopes that its atopic dermatitis drug (VTP-38543) might create more value to the company after Anacor’s acquisition by Pfizer.

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