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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