The biotech sector performed well in August, with the iShares Nasdaq Biotechnology ETF (NASDAQ: IBB) up almost 3.5% this week alone.
Research by Raymond James indicates that in just the past week, biotech funds saw $510 million in capital inflows. This in part led major biotech companies like Biogen Inc (NASDAQ: BIIB) and Celgene Corp (NASDAQ: CELG) to post solid returns this week.
In the same report, Raymond James analyst Laura Chirco said “we continue to see biotech sector performance being influenced by several drivers: data readouts, commercial execution, M&A potential and capital markets accessibility. Biotech fund flows — including ETF activity — remain a driver to watch.”
CNBC analyst Meg Tirrell identifies three main drivers for biotech growth: company-specific news, the FDA’s stance, and drug pricing outlook.
The overall outlook for drug pricing remains strong. Although US President Donald Trump reiterated his support for lower drug prices last Friday, little tangible action seems to be in the works.
Mylan N.V. (NASDAQ: MYL) recently put pressure on its manufacturing partner Pfizer Inc (NYSE: PFE) to resolve supply issues with EpiPen production, a life-saving product for those prone to life-threatening allergic reactions. These production slowdowns came after FDA warnings over quality control.
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