Shares of Biogen Idec (NasdaqGS: BIIB), one of the largest U.S. biotechnology companies, are up 7% Friday and earlier hit an all-time high after the company said an early-stage study revealed its Alzheimer’s drug, aducanumab, stemmed cognitive decline in patients compared with those taking a placebo.
Though off its highs of the day, Biogen is still notching one of the best intraday performances among S&P 500 members, helping extend the stock’s year-to-date gain to 37%. Not that they need the help, but some already high-flying biotech exchange traded funds are getting a lift from the Biogen news.
To this point in Friday’s session, 67 ETFs have made all-time highs, a group that includes nine biotech funds. In recent months, the biotech ETF space has grown to include more focused funds that emphasize companies in particular trial stages, have already received FDA approval or mid- and small-cap biotech names. [A Different Type of Biotech ETF]
So when a stock like Biogen pops, it is usually the more seasoned, traditional biotech ETFs that benefit most. That includes the iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB), the largest biotech ETF. IBB, also the oldest U.S.-listed biotech ETF, featured an almost 9.6% weight to Biogen as of March 19.
Heading into Friday’s session, biotech’s “big four” – Biogen, Celgene (NasdaqGS: CELG), Amgen (NasdaqGS: AMGN) and Gilead Sciences (NasdaqGS: GILD) – combined for almost 32% of the ETF’s weight.
At the end of 2011, the ETF had $1.39 billion in assets before swelling to $6.93 billion at the end of last year, according to Bloomberg. Highlighting investors’ thirst for biotech ETFs, IBB has added over $1.8 billion in new assets this year, rising to $8.77 billion. [Healthcare ETFs See Massive Asset Growth]