The ALPS Medical Breakthroughs ETF (SBIO) rallied 14.53% last week, propelled by positive earnings and two significant M&A announcements in the portfolio.
SBIO’s small-to-mid cap holdings have been beaten down year-to-date but, as history suggests, depressed valuations in the space ignited a wave of M&A last week, leading SBIO to outperform its competitors and broader equities markets, ALPS wrote in a recent insight.
SBIO’s rally was led by the news of immunotherapy company, ChemoCentryx Inc. (CCXI, 1.79% weight as of August 5), gaining a scorching 113.89% after Amgen Inc. (AMGN, not in SBIO) announced it would acquire the company for $3.7 billion, or a 115% premium to its prior day close, according to ALPS. The deal highlights CCXI’s immunotherapy portfolio to treat inflammatory diseases and cancer.
Global Blood Therapeutics Inc. (GBT, 2.07% weight as of August 5) also energized mid-cap biotech last week on reports that the company, which produces a recently-approved immunotherapy for sickle-cell disease, may be acquired by Pfizer Inc. (PFE, not in SBIO) for an estimated $5 billion, or a 118% premium to its prior day close, ALPS wrote.
Cancer-focused company Day One Biopharmaceuticals Inc. (DAWN, 0.73% weight as of August 5) rose 38% last week on earnings that showed expanded development of its immunotherapy to treat solid tumors and relapsed pediatric low-grade glioma.
Agios Pharmaceuticals Inc. (AGIO, 0.81% weight as of August 5) rose nearly 38% last week after reporting strong launch revenues for its immunotherapy to treat anemia, while Aldeyra Therapeutics Inc. (ALDX, 0.20% weight as of August 5) gained over 37% last week after reporting strong progress on its drug pipeline to treat eye diseases.
Also contributing to SBIO’s increase last week was T-cell immunotherapy company Allovir Inc. (ALVR, 0.25% weight as of August 5), which rose over 69% on strong earnings and data milestones, while Compass Pathways Inc. (CMPS, 0.43% weight as of August 5) increased 28.74% on encouraging progress in using psilocybin to treat depression, ALPS wrote.
Other biotech ETFs to consider include the SPDR S&P Biotech ETF (XBI), the iShares Biotechnology ETF (IBB), and the First Trust NYSE Arca Biotechnology Index Fund (FBT).
For more news, information, and strategy, visit the ETF Building Blocks Channel.
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