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]
IBB is off its highs of the day, but is trading slightly higher after earlier touching another all-time high. The same can be said of the Market Vectors Biotech ETF (NYSEArca: BBH), which is up 0.4% at this writing, extending its year-to-date gain to 20%. The $798 million BBH has a 7.9% weight to Biogen, making the stock the ETF’s fourth-largest holding.
Gilead Sciences, the maker of the well-known hepatitis-C treatments harvoni and sovaldi, is also providing some help to biotech ETFs Friday. RBC said harvoni prescriptions rose 2% last week while combined harvoni and sovaldi prescriptions also increased 2%, which would put first-quarter Harvoni sales at $3.2 billion, above Wall Street estimates of $2.8 billion to $2.9 billion, according to Barron’s.
Gilead is BBH’s largest holding at a weight of 12% and the stock is almost 7% of IBB’s lineup.
Market Vectors Biotech ETF
