After brutal losses at the end of 2018, the biotechnology sector is about to have the best start of the year since 2012.
Two new offers to start the year and positive test presentations at J.P. Morgan 's health conference have breathed new life into some of the biggest losers of titles in the past year.
The iShares Nasdaq Biotech Index gained 13% in the first eight trading days of the year, finishing down to just one day since the market was sold on December 24th. It marks a significant reversal after a 20% fall in the index in the fourth quarter. quarter.
Speculation on takeovers has been a major catalyst for the rally. The $ 74 billion Bristol-Myers Squibb deal on the purchase of oncology drug maker Celgene has helped fuel rumors of takeover, quickly confirmed by the $ 8 billion deal Eli Lilly Dollars on Biotechnology Loxo Oncology at the Launch of JP Morgan's Health Conference Monday.
Eli Lilly agreed to acquire Loxo Oncology for a 68% premium, which resulted in a decrease of the acquirer's shares of more than 8% for the year. Loxo jumped 66% this week to about $ 232 per share, but the drug maker targeting gene therapy was already outperforming the market, having gained 66% in 2018.
The positive trial data presented at the J.P. Morgan conference also yielded significant gains in the sector. Shares of Sage Therapeutics soared after the company reported positive late-stage data on its treatment of postpartum depression. The stock has gained nearly 30% so far this week, closing at $ 126.22 per share on Thursday, after a loss of nearly 42% for the year through 2018.
Amarin shares have more than tripled in 2018 and this week, the company's shares climbed an additional 39% until Thursday's close at $ 18.35. Prior to the conference, the company released conservative sales prospects for its new drug Vascepa heart, slightly lower than analysts' estimates. But investors have emerged more optimistic prospects with the presentation of CEO John Thero.
"Although nothing new was presented … the feeling was positive from the investors we spoke with who attended the meeting," wrote Cantor Fitzgerald's analysts in a note to clients . They added that the doctors' comments on the drug were positive and that "cardiologists in particular appreciate the data and are preparing to prescribe vascepa to patients, according to the company."
Part of the biotech rally may be due to the oversized nature of the sector. Biotechnology was among the most oversold sectors of the market in 2018, registering a drop of nearly 10% last year. A number of this week's biggest winners remain firmly in the bear market.
Other health sectors that recorded gains in 2018 were less affected by this week's conference.
The index that follows large-cap drug manufacturers, the NYSE Arca Pharmaceutical Index, is stable for the beginning of the year after gaining more than 4% in 2018.
Similarly, the health care sector S & P 500, which was the best-performing blue chip sector in 2018, underperformed the market in the New Year and has now grown about 1% .
Correction: This story has been revised to clarify that it is Eli Lilly who agreed to acquire Loxo Oncology.
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