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Why Biotech ETFs are Surging to New Highs

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We have seen very strong M&A activity in the biotech space of late and the trend is expected to continue as big pharmaceutical companies are trying to gain an edge in the increasingly competitive cancer treatment market.

Yesterday, it was reported that Merck (MRK) is acquiring ArQule (ARQL for $2.7 billion and Sanofi (SNY) will buy Synthorx (THOR) for $2.5 billion. ArQule rose more than 100% while Synthorx surged about 170% on those reports. Both are clinical-stage biotech companies specializing in cancer drugs. Per EvaluatePharma, the $123 billion global cancer drug market is expected to almost double by 2024.

Last month, Novartis (NVS) announced it is buying cholesterol drugmaker The Medicines Company for about $10 billion. The cholesterol drug under development is for patients who do not respond well to older statin pills.

Aurinia Pharmaceuticals (AUPH) has surged after the company announced positive results from a trial for its lupus-related drug.

CRISPR Therapeutics (CRSP) reported encouraging results from phase I/II studies for gene-editing therapy CTX001 for two severe blood disorders. Crispr, the best-known gene-editing technology, works like molecular scissors which can be used to edit one particular spot in the genome while avoiding unintentional changes elsewhere.

The FDA recently approved Global Blood Therapeutics (GBT)’s drug for treating sickle cell disease.

To learn more about the ARK Genomic Revolution Multi-Sector ETF (ARKG), ALPS Medical Breakthroughs ETF (SBIO), Virtus LifeSci Biotech Clinical Trials ETF (BBC) and SPDR S&P Biotech ETF (XBI), and how they have benefitted from these developments, please watch the short video above.

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