Yahoo Finance Mid-Cap Biotech Stocks Outperform in Week Ended July 24
Biotech ETFs: How Did They Perform in the Week Ended July 24?
Biotech stock performances
By market cap, the iShares Nasdaq Biotechnology ETF’s (IBB) top-ten large-cap biotech stocks fell by 5.64% in the week ended July 24. Its top-ten mid-cap fell by 2.60%, and the top-ten small-cap fell by 6.68%. A similar trend was noticeable in the SPDR S&P Biotech ETF (XBI) and the Health Care Select Sector SPDR ETF (XLV).
Across all three of these ETFs—IBB, XBI, and XLV—the mid-cap stocks outperformed the large-cap and small-cap stocks for the week ended July 24, 2015. The above graph reflects the performance of all three caps of these ETFs.
Why did large-cap stocks underperform?
Surprisingly, all three ETFs were hit by the massive price drop in Biogen (BIIB) stock. The stock fell as much as 25.6% for the week on the backdrop of lower-than-estimated sales for its major drugs. IBB, XLV, and XBI have weights of 7.37%, 3.28%, and 0.95%, respectively, in BIIB. IBB was the most impacted ETF. XBI was impacted the least, as it follows the equal weight methodology.
Among the mid-caps, Medivation (MDVN) fell by 9.25%, as JMP Securities lowered MDVN’s 2015 and 2016 earnings. The impact was less compared to BIIB, as IBB and XBI carried weights of 1.46% and 0.99%, respectively. On the other hand, Intrexon (XON) rose 1.68%, as it announced the submission of an IND (Investigational New Drug) application with the FDA (U.S. Food and Drug Administration) for FCX-007.
Among small caps, Xoma (XOMA) returned -79.6%. The stock went down when the drug gevokizumab failed in the final stage of its clinical trial. This fall reminds investors of the risk of investing in small-cap biotech plays. However, the risk can potentially be diversified. IBB and XBI had an exposure to XOMA of 0.06% and 0.95%, respectively, in their portfolios.
Browse this series on Market Realist:
