Biotech

Biotech Investing

Which companies have the heaviest weight in the SPDR S&P Biotechnology ETF

For biotech investors looking at exchange traded funds (ETFs), there are several options to choose from, including the sector’s largest fund, iShares NASDAQ Biotechnology ETF (NASDAQ:IBB). While IBB can provide investors with exposure the biotech sector through tracking the NASDAQ Biotechnology index (NASDAQ:NBI), investors should know there are other ETF options open to them. One of those options is the SPDR S&P Biotechnology ETF (NYSEARCA:XBI).


The SPDR S&P Biotechnology ETF seeks to mirror the performance of the S&P Biotechnology Select Industry Index. With 90 holdings, the fund provides investors with exposure to a variety of companies in the biotech sector, including some of the smaller companies in the space.
The fund’s top five holdings include:
  1. Medivation Inc. (NASDAQ:MDVN)
  2. ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD)
  3. Neurocrine Biosciences Inc. (NASDAQ:NBIX)
  4. Alkermes Plc (NASDAQ:ALKS)
  5. Ligand Pharmaceuticals Incorporated  (NASDAQ:LGND)

Individually, none of these companies currently hold more than a 3.07 percent weight in XBI.

Medivation Inc

Looking to address unmet medical needs when it comes to serious diseases, Medivation is a biopharmaceutical company based in San Francisco. The company recently thwarted an unsolicited takeover bid from Sanofi, which it noted was inadequate at $52.50 per share. The company also recently announced preliminary data from its 12-patient Phase 2 trials for enzaluutamide, for patients with non-metastatic castration sensitive prostate cancer.
Medivation is XBI’s top holding, with a 3.07  percent share of the fund’s assets. Year-to-date Medivation has increased 28 percent.

ACADIA Pharmaceuticals

Focused on developing and commercializing therapies for people living with central nervous system disorders. On April 29, the company reported that following FDA approval of  NUPLAZID™, ACADIA has the first approved drug treatment of hallucinations and delusions associated with Parkinson’s disease psychosis.
The company’s year-to-date performance has been less than stellar, with a 16 percent decrease since the beginning of January. Still. ACADIA Pharmaceuticals accounts for 2.78 percent of XBI’s total holdings. ACADIA has a market cap of $3.57 billion.

Neurocrine Biosciences

Neurocrine Biosciences is focused on neurological and endocrine based diseases and disorders. Neurocrine has two lead late-stage clinical trials for elagolix, a gonadotropin-releasing hormone antagonist for women’s health that is partnered with AbbVie Inc., and NBI-98854 (Valbenazine) a vesicular monoamine transporter 2 inhibitor to treat movement disorders.
Neurocrine makes up 2.48 percent of XBI’s holdings. In the last three months, Neurocrine has seen a 32 percent increase.

Alkermes

Alkermes is focused on treating debilitating diseases, with a particular focus on central nervous system disorders like schizophrenia, depression, addiction and multiple sclerosis. The company recently announced its intentions to start second clinical trials of ALKS 7119 based on the preliminary results from Phase 1. Phase 2 is planned to start in the third quarter of 2016. ALKS 7119 is being developed for the treatment of agitation in patients with Alzheimer’s disease and other central nervous system.
Year-to-date Alkermes has seen steep losses, having dropped 43 percent in January. Still, Alkermes has managed to climb back up, recouping 32 percent on its share price over the last three months. The company accounts for a 2.31 percent of XBI’s holdings.

Ligand Pharmaceuticals

Rounding off the top five holdings of the S&P biotech ETF is Ligand Pharmaceuticals, a company that helps other biotechnology and pharmaceutical companies through acquisition or development of technologies. Most recently, the company acquired a portfolio of synthetic royalty and milestone rights from CorMatrix Cardiovascular for $17.5 million.
Ligand makes up 2.29 percent of XBI’s assets.


Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.
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