Biotech’s rally hasn’t let up, as shares of the ARK Genomic Revolution ETF (ARKG) have increased nearly 37% over the past month.
A surge in biotech share prices that began in mid-June is lasting longer than skeptics expected. Shares of ARKG were trading at $27.20 on June 13 and have risen to $37.14 by late afternoon on July 13, according to YCharts.
Biotechs were some of the hardest-hit stocks in the first half of the year. The weakness in the biotech sector that was observed earlier this year reversed on June 13 when it was reported that Merck & Co. Inc. (MRK) was looking to buy one of the oldest immunotherapy companies in the sector, Seagen Inc. (SGEN), resulting in investors bidding up the space.
Weeks after the speculation surrounding a potential acquisition of Seagen first came to light, the two companies are now reportedly nearing a deal that could be the world’s largest since 2020 — valued at $40 billion, or above $200 per share, the Wall Street Journal reported, citing people familiar with the matter.
A $40 billion buyout would give major shareholders in Seagen lots of cash to invest, which could go into other biotech stocks, creating the possibility of a run-up across the space.
ARKG is the best-performing ETF in the health & biotech equities category over a one-week period, according to VettaFi. The fund is an actively managed equity strategy that aims to provide exposure to DNA sequencing technology, gene editing, CRISPR, therapeutics, agricultural biology, and molecular diagnostics.
The fund’s top holdings as of July 13 include Exact Sciences Corp. (EXAS, 7.43%), Teladoc Health Inc. (TDOC, 5.30%), Ionis Pharmaceuticals Inc. (IONS, 5.29%), CRISPR Therapeutics AG (CRSP, 5.06%), and Fate Therapeutics Inc. (FARE, 4.56%), according to the fund’s website.
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