Start the conversation
Leave a Reply
Biotech stocks have delivered a healthy dose of returns to investors year to date. The iShares Nasdaq Biotech Index ETF (Nasdaq: IBB) is up a whopping 65% so far in 2014.
That follows a 60%-plus return last year, far outpacing the 30% gain of the broader market. Some 81 biotech companies saw share prices more than double in 2013.
Micro-cap Chelsea Therapeutics Intl Inc. (Nasdaq: CHTP) shares soared 120% intraday on Jan. 15 in anticipation of an FDA approval of their drug Northera, a treatment for a rare form of low blood pressure. Wednesday, shares gained another 35% following the government agency's nod.
"It's a real biotech bull market," Karen Andersen, a biotech analyst at Morningstar, told USA Today. "There's a lot of optimism."
Additionally, the value of mergers and acquisitions of biotech companies climbed more than 20% last year to $131.8 billion.
Fueled by breakthrough treatments gaining faster regulatory approval for chronic ailments and deadly diseases, including hepatitis C, multiple sclerosis, and cancer, biotech stocks are poised for another stellar year in 2014.
Biotechs are also behind the best start to the year for IPOs since the dot-com era. Nearly half of this year's initial public offerings have been biotechs.
And look for more M&A activity in 2014. Just this week there was a $25 billion deal in the sector when Irish drugmaker Actavis PLC (NYSE: ACT) agreed to buy New York-based Forest Laboratories Inc. (NYSE: FRX).
"Big Pharma has clearly concluded that it's cheaper to buy than to build, so there's a big appetite for acquiring biotechs, and that's helped to bring the generalist investor into the biotech market," G. Steven Burrill, chief executive officer of San Francisco healthcare financial firm Burrill & Co, told the Boston Globe.
With biotech stocks among the biggest gainers in 2014, here are three of today's biggest gainers in the sector.