The pace of biotech M&A “could accelerate if changes in the tax code support this trend by facilitating the repatriation of cash ‘trapped’ overseas for bigger biopharma companies,” Adnan Butt, an analyst at RBC Capital Markets, told Reuters.
ETF traders whore are betting big on the biotechnology sector rebound have also utilized leveraged long options. For instance, the Direxion Daily S&P Biotech Bull Shares (NYSEArca: LABU), which takes the 3x or 300% daily performance of the S&P Biotechnology Select Industry Index, surged 81.5% over the past week.
Other options include the ProShares UltraPro Nasdaq Biotechnology (NasdaqGM: UBIO), which takes the 3x daily performance of the Nasdaq Biotechnology Index, and the ProShares Ultra Nasdaq Biotechnology (NasdaqGM: BIB), which takes the 2x performance of the same benchmark.
“Biotech has a lot of room to run over the next six to 12 months,” David Fajardo, Senior Vice President of Direxion Investments, told ETF Trends in a call.
For more information on the biotech sector, visit our biotechnology category.
iShares Nasdaq Biotechnology ETF