Reviewing biotech ETFs
The US markets closed flat for the week ending May 6, 2016. The Dow Jones Industrial Average and the SPDR S&P 500 ETF (SPY) fell marginally by 0.2% and 0.3%, respectively. However, biotech ETFs saw some sell-off and lost ground in a big way with the exception of the iShares US Medical Devices (IHI). It outperformed markets and other biotech ETFs with a return of 0.1%. The worst performer has been the SPDR S&P Biotech ETF (XBI). It fell by 6.6%. It was followed by the iShares Nasdaq Biotechnology ETF (IBB) and the Health Care Select Sector SPDR ETF (XLV). They fell by 4.7% and 0.9%, respectively, for the same period.
The above chart gives information on prices, returns at different intervals, moving average prices of different biotech ETFs, along with the SPDR S&P 500 ETF as of May 6, 2016.
Top gainers and losers for the week
Sarepta Therapeutics (SRPT) and Bio-Techne (TECH) were the biggest gainers for the week ending May 6, 2016. They rose by 24.7% and 8.3%, respectively. Both of the stocks announced their 1Q16 earnings during the week. Sarepta, on a GAAP (generally accepted accounting principles) basis, reported a net loss of $59.8 million—compared to a net loss of $61.6 million. The company had $140.6 million in cash and cash equivalents including restricted cash as of March 31, 2016. Sarepta has a weight of 1.6% in XBI’s portfolio.
Bio-techne stock gained on a good earnings report for 3Q16. It reported net sales of $131 million—compared to $114.1 million for the same period last year. This represents an increase of 15%. The net earnings were reported at $30.3 million—compared to $24.3 million for the same period last year on a GAAP basis. Bio-techne has a weight of 0.7% in IBB’s portfolio.
The biggest loser for the week ending May 6, 2016, was Endo International (ENDP). It fell by 40.1%. The stock fell due to weaker guidance that it provided on its earnings report. We’ll discuss the earnings and its guidance briefly later in this series. Endo International has a weight of 1.2% in IBB’s portfolio.