A brief look at the top five holdings in the iShares NASDAQ Biotechnology ETF
When it comes to investing in biotechnology, investors can find themselves faced with two options: stocks or exchange traded funds (ETFs) Should they invest directly in stocks? Which companies should they invest in? Better yet, would investing in an ETF that has a large selection of holdings in the sector be better? Does an ETF offer shelter from the tumultuous state of the biotechnology sector?
As a good place to start, Investing News Network is looking at the top five holdings in the the biotechnology sector’s largest ETF, the iShares NASDAQ Biotechnology ETF (NASDAQ:IBB). IBB tracks the NASDAQ Biotechnology index (NASDAQ:NBI), and investors can expect the same reaction of the fund as with the exchange. With 189 holdings, by investing in IBB investors are not only gaining exposure to a wide selection of companies in the biotechnology sector, but also exposure to some of the biggest companies operating in the space.
- Gilead Sciences (NASDAQ:GILD)
- Amgen (NASDAQ:AMGN)
- Celegene (NADSAQ:CELG)
- Biogen (NASDAQ:BIIB)
- Regeneron Pharmaceuticals (NASDAQ:REGN)
Individually, each of these five holdings account for are weighted more than 5 percent – but less than 10 percent – of IBB’s total holdings.
Headquartered in Seattle, Washington, Gilead Sciences has a portfolio of products and pipeline of investigational drugs including treatments for HIV/AIDS, liver diseases, cancer, inflammatory and respiratory diseases and cardiovascular conditions.
Gilead Sciences is the top holding in the IBB fund, accounting for 8.09 percent of the fund’s holdings. Like the rest of the biotechnology sector, Gilead Sciences has had its ups and downs in recent months, posting a 5.3 percent loss year-to-date (YTD). However, the company is continuing to make strides in a positive direction, with talks of potential acquisition options. Recently, Gilead signed an agreement with Nimbus Therapeutics for the acquisition of Nimbus Apollo, a subsidy of Nimbus Therapeutics, that will give Gilead rights of leading Acetyl-CoA Carboxylase (ACC) inhibitor program, which is a novel platform for the non-alcoholic steatohepatitis (NASH) and hepatocellular carcinoma (HCC) treatment.
Touted as one of the leading companies in the biotechnology sector, Amgen holds the number two holding spot in IBB with a 8.08 percent weight. The biotechnology firm uses genetics to address the complexities of diseases. The company focuses on six therapeutics areas, including oncology/hematology, cardiovascular disease, inflammation, bone health, nephrology and neuroscience.
Despite the turmoil in the biotechnology sector over the last year, Amgen has managed to maintain a fair bit of stability, hovering within a range of between $140 and $160 per share since mid-September. YTD, Amgen is down 3.66 percent.
With a 7.74 percent weight in the iShares NASDAQ Biotechnology ETF, Celegene is third in the company’s top holdings. The biopharmaceutical firm is focused primarily on therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation. The company currently has seven therapies on the market.
Hit harder than the two previous stocks by the current state of the biotechnology market, Celgene has see a 13.32 percent drop YTD. Celegene is currently trading at $103 per share.
Based in Cambridge, Massachusetts, Biogen develops, manufactures and markets innovative therapies for patients living with serious neurological, autoimmune and rare diseases. On its own, Biogen has therapies for multiple sclerosis hemophilia. The company also has two partnered therapies and one biosimilar.
Biogen has a weight of 7.67 percent in the ETF holdings. Since mid-July, Biogen has shed just under 38 percent, however in recent months the company appears to be regaining some stability.
Rounding off the top five holdings in the iShares NASDAQ Biotechnology ETF is Regeneron Pharmaceuticals that is focused on serious medical conditions. The company has had some exciting news of late, having entered into a licensing agreement with MedImmune for the development of antibody drug conjugates to treat cancer, and the joint announcement with Sanofi (NYSE:SNY) of positive results from two phase 3 trials in inadequately controlled moderate-to-severe atopic dermatitis.
Regeneron holds a 7.45 percent weight in the IBB total holdings.
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Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.