The iShares Nasdaq Biotechnology ETF (NASDAQGM: IBB), the largest biotech exchange traded fund by assets, and other biotechnology assets traded slightly higher Wednesday after the U.S. House of Representatives on Tuesday passed “right to try” legislation.
That proposal “would allow people with life-threatening illnesses to bypass the Food and Drug Administration to obtain experimental medications, ending a drawn-out battle over access to unapproved therapies,” reports The Washington Post.
IBB tracks the Nasdaq Biotechnology Index and holds nearly 160 stocks. Biogen Inc. (NASDAQ: BIIB), Amgen Inc, (NASDAQ: AMGN), Gilead Sciences Corp. (NASDAQ: GILD) and Celegene Inc. (NASDAQ: CELG) combine for a significant percentage of the fund’s weight. Those are four of the largest biotechnology companies in the U.S.
“President Trump is expected to quickly sign the measure, which was praised by supporters as a lifeline for desperate patients but denounced by scores of medical and consumer groups as unnecessary and dangerous,” according to the Post.
There are supporters of the biotech space. Healthcare stocks are also showing attractive valuations relative to other defensive sectors, which are richly valued. Biotechnology historically trades at multiples that are elevated relative to broader benchmarks, but after last year’s of struggles for biotechnology names, some analysts see value with some big-name biotech stocks.
“The measure, championed by Sen. Ron Johnson (R-Wis.), is designed to give patients an alternative way to obtain drugs not approved by the FDA,” reports the Post. “Currently, there are two options for patients seeking experimental medications: enrolling in clinical trials if they are eligible or participating in the FDA’s ‘expanded access’ program. The agency has said that it approves almost all such requests to that program.”