Reviewing IBB’s mid-cap stocks
The mid-cap stocks of the iShares NASDAQ Biotechnology ETF (IBB) rose by 1.4%, outperforming the SPDR S&P 500 ETF (SPY), which rose by 0.8% on May 2, 2016. Among the 27 mid-cap stocks IBB holds in its portfolio, six stocks fell and 21 stocks rose from the previous day’s closing. On a year-to-date basis, the mid-cap stocks were down by 16.2% collectively. They were still better positioned than IBB’s large-cap stocks.
The above graph reflects the performance of the mid-cap stocks of the iShares NASDAQ Biotechnology ETF, the SPDR S&P 500 ETF, and IBB on May 2, 2016.
Kite Pharma’s drug receives orphan drug status
IBB’s mid-cap holding Kite Pharma (KITE) rose by 3.3% on the news of the FDA granting orphan drug status to Kite’s KTE-C19. The FDA’s Orphan Drug Designation program provides orphan drug status for treatments of rare diseases or disorders that affect fewer than 200,000 people in the United States.
Kite Pharma closed at $47.80 and was trading below its 20-day moving average price. Year-to-date, Kite Pharma has fallen by 22.4%. Its relative strength index of 49 indicates that the stock is neither overbought nor oversold. Kite Pharma has a book value of $12.65 per share. At its current price, the stock is trading at a price-to-book value of ~3.8x. Peers Ultragenyx Pharmaceutical (RARE), PRA Health Sciences (PRAH), and Juno Therapeutics (JUNO) are trading at price-to-book value multiples of ~5.1x, 4.2x, and 3.0x, respectively.
Analyst recommendations and targets
As of May 2, 2016, analysts have recommended a 12-month target price of $78.30, which is 68% higher than its current price. At present, 13 analysts have given “buy” recommendations while no analysts have recommended to “hold” or to “sell” the stock. Kite Pharma accounts for 0.4% of IBB’s portfolio.