The biotech sector has gotten a lot of attention lately both in the financial markets and in Washington. The sector, which was one of the worst performing areas of the market in 2016, posting a loss of more than 20%, has started posting gains again, and is looking like the rally may be poised to continue. The biggest play in the sector, the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB), is up more than 10% on the year (its smaller equal weight counterpart, the SPDR S&P Biotech ETF (XBI), is up over 17%).
The sector has alternatively gotten good and bad news from the White House. For many months, there has been talk of lowering drug prices through open competition or price caps putting pressure on the big drug manufacturers. On the other hand, President Trump spoke recently of his desire to reform the entire drug approval process in order to "speed the approval of life-saving medications" and "cutting the red tape at the FDA." That notion was welcomed by the equity markets even though it received a tepid response from big pharma companies.
One thing working in favor of biotech right now is M&A and the big prize could be Bristol-Myers Squibb (BMY). A StreetInsider article from this week called the company "in play" and listed Roche (OTCQX:RHHBY), Novartis (NVS), Gilead (GILD) and Pfizer (PFE) all as potential buyers. Acadia Pharmaceuticals (ACAD) could also be up for grabs with Biogen (BIIB) rumored to be a possible bidder. In its quarterly analyst meeting, Amgen's (AMGN) CEO Bob Bradway discussed how his company was going to be on the lookout for acquisitions, both big and small.
Even Gilead, the big biotech that just caught Wall Street off guard when it significantly lowered 2017 revenue guidance due to weak sales in its hepatitis C drugs, even
