No remedy in sight for biotech sector
24 March 2016 London
Image: Shutterstock
Short interest in biotech stocks are at record highs as a handful of stocks post positive returns, according to Markit.
Markit points to less than reassuring promises coming from presidential hopefuls in the US and, more specifically, an 鈥榠nfamous鈥� tweet by Democratic front-runner Hillary Clinton promising to clamp down on 鈥渙utrageous鈥� price gouging in the drugs market to answer why biotech stocks have offered consistent returns for short sellers so far in 2016
Markit data highlights that more than 50 percent of biotech stocks have declined by more than 30 percent so far this year across the 190 stocks that make up the iShares Nasdaq Biotechnology ETF (IBB).
PTC Therapeutics was the hardest hit within the ETF, falling 82 percent in 2016 alone. The company has a fifth of shares currently outstanding on loan. Celldex Therapeutics only did slightly better, falling 79 percent and short interest at 17.5 percent.
Two of the most shorted stocks currently among the 190 IBB constituents are Ligand and Merrimack Pharmaceuticals, which both feature in the top 20 performers year-to-date鈥攄eclining by a relatively low 9 percent and 1 percent, respectively.
The IBB is more broadly down a drastic 37 percent from highs seen in the middle of last year. The ETF currently has $5.8 billion of assets under management, the largest in the category.
Markit points to less than reassuring promises coming from presidential hopefuls in the US and, more specifically, an 鈥榠nfamous鈥� tweet by Democratic front-runner Hillary Clinton promising to clamp down on 鈥渙utrageous鈥� price gouging in the drugs market to answer why biotech stocks have offered consistent returns for short sellers so far in 2016
Markit data highlights that more than 50 percent of biotech stocks have declined by more than 30 percent so far this year across the 190 stocks that make up the iShares Nasdaq Biotechnology ETF (IBB).
PTC Therapeutics was the hardest hit within the ETF, falling 82 percent in 2016 alone. The company has a fifth of shares currently outstanding on loan. Celldex Therapeutics only did slightly better, falling 79 percent and short interest at 17.5 percent.
Two of the most shorted stocks currently among the 190 IBB constituents are Ligand and Merrimack Pharmaceuticals, which both feature in the top 20 performers year-to-date鈥攄eclining by a relatively low 9 percent and 1 percent, respectively.
The IBB is more broadly down a drastic 37 percent from highs seen in the middle of last year. The ETF currently has $5.8 billion of assets under management, the largest in the category.
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