Latest news with #XBI
Yahoo
2 days ago
- Business
- Yahoo
Wall Street waves off Trump's 200% pharma tariff threat
Large pharmaceutical stocks and funds are trading flat or up slightly Wednesday, sending a clear signal after President Trump's threat Tuesday to leverage as much as 200% tariffs on pharma. "We'll be announcing something very soon on pharmaceuticals. We're going to give people about a year, a year and a half to come in ,and after that they're going to be tariffed ... at a very, very high rate, like 200%," Trump said at a Cabinet meeting Tuesday. Mizuho Securities health sector expert Jared Holz noted the market initially reacted before right-sizing Tuesday. "The space sold off on the headlines yesterday but finished flat/up on the whole, evidence of the buy- side shaking off noise," he wrote in a note to clients Wednesday. The S&P's Biotech ETF (XBI) and Health Care Select Sector Fund (XLV) both remained flat in trading Tuesday afternoon through Wednesday morning, indicating the indifference Wall Street has adopted to Trump's tariff threats — with some analysts expecting the Street-coined term TACO, or Trump Always Chickens Out, to be applied in the case of pharma as well. "200% Drug Tariffs, or 'TACO' Eventually?" Jefferies analyst Cui Cui headlined in a note Wednesday, adding, "[We] expect considerable industry resistance to drug tariffs." Jefferies health sector analyst Akash Tewari similarly mocked the tariff in his note to clients, headlined "Tariffs schmariffs — why the Trump pharma announcement is noise." Tewari explained that with the grace period of 1 to 1.5 years, the impact of tariffs "could be more modest" than previous estimates, allowing more time for companies to mitigate any potential impact. Companies also indicated in first quarter discussions with analysts that they expect a different approach rather than a blanket tariff. "Several [companies] mentioning stockpiling inventory ahead of tariffs to mitigate near-term impact & ability to ramp up US capacity [plus] many hinted there could be a distinction between Section 232 tariffs for countries that pose national security concerns vs localities like Ireland," Tewari wrote. The Trump administration launched a Section 232 investigation in April to determine which drug manufacturers are operating in countries that pose a national security threat to the US. Those drugs and drugmakers could face the steepest penalties, if they have not moved or adjusted operations accordingly. The US already largely produces branded drugs domestically, but the lower-cost generics market is mostly based in Asia and Europe. Some pharma executives have indicated they could work with the US to adjust the threat by producing more locally. "We don't make those medicines today, we invented them long ago, but the industry could play a role in helping national security, and that would be fine," Eli Lilly (LLY) CEO David Ricks told Yahoo Finance earlier this year. Mizuho's Holz expects the tariff will be significantly less than Trump's comments. "Makes nearly as much sense as every other threat this administration has uttered since taking over. Will certainly be walked down dramatically. Imagine next headline will be POTUS praising entities such as LLY and JNJ for their patriotism (moving more production domestically)," Holz wrote. "Street has prudently ignored the 200% figure and deemed as erroneous," he added. Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem. Click here for in-depth analysis of the latest health industry news and events impacting stock prices
Yahoo
12-06-2025
- Business
- Yahoo
Should You Invest in the SPDR S&P Biotech ETF (XBI)?
Designed to provide broad exposure to the Healthcare - Biotech segment of the equity market, the SPDR S&P Biotech ETF (XBI) is a passively managed exchange traded fund launched on 01/31/2006. Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors. Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Biotech is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%. The fund is sponsored by State Street Global Advisors. It has amassed assets over $4.92 billion, making it one of the largest ETFs attempting to match the performance of the Healthcare - Biotech segment of the equity market. XBI seeks to match the performance of the S&P Biotechnology Select Industry Index before fees and expenses. The S&P Biotechnology Select Industry Index represents the biotechnology sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Biotech Index is a modified equal weight index. Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same. Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space. It has a 12-month trailing dividend yield of 0.16%. Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis. This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio. Looking at individual holdings, Exact Sciences Corp (EXAS) accounts for about 3.12% of total assets, followed by Alnylam Pharmaceuticals Inc (ALNY) and Neurocrine Biosciences Inc (NBIX). The top 10 holdings account for about 27.11% of total assets under management. So far this year, XBI has lost about -6.31%, and is down about -8.60% in the last one year (as of 06/12/2025). During this past 52-week period, the fund has traded between $69.80 and $104.18. The ETF has a beta of 0.86 and standard deviation of 30.70% for the trailing three-year period, making it a high risk choice in the space. With about 129 holdings, it effectively diversifies company-specific risk. SPDR S&P Biotech ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XBI is a reasonable option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space. First Trust NYSE Arca Biotechnology ETF (FBT) tracks NYSE Arca Biotechnology Index and the iShares Biotechnology ETF (IBB) tracks Nasdaq Biotechnology Index. First Trust NYSE Arca Biotechnology ETF has $1.04 billion in assets, iShares Biotechnology ETF has $5.32 billion. FBT has an expense ratio of 0.56% and IBB charges 0.45%. To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SPDR S&P Biotech ETF (XBI): ETF Research Reports Alnylam Pharmaceuticals, Inc. (ALNY) : Free Stock Analysis Report iShares Biotechnology ETF (IBB): ETF Research Reports Neurocrine Biosciences, Inc. (NBIX) : Free Stock Analysis Report Exact Sciences Corporation (EXAS) : Free Stock Analysis Report First Trust NYSE Arca Biotechnology ETF (FBT): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
10-06-2025
- Business
- Reuters
Recursion to lay off 20% of workforce, narrows focus amid biotech downturn
June 10 (Reuters) - Recursion Pharmaceuticals (RXRX.O), opens new tab said on Tuesday it will lay off around 20% of its workforce and focus on developing drugs for rare diseases and cancers to reduce cash burn during a prolonged biotech industry downturn. Growing concerns over health policy under President Donald Trump's administration have exacerbated existing challenges for the biotech industry, which has been struggling with decreased investor funding since the COVID-19 pandemic. The Salt Lake City, Utah-based biotech is trying to "reduce the complexity, especially in the context of a challenging and frictional capital markets environment, so that every dollar drives real return on investment (ROI) for our investors and for patients," CEO Christopher Gibson told Reuters. Recursion's restructuring plan is expected to keep its 2025 cash burn below $450 million and 2026 burn under $390 million, extending its cash runway into the fourth quarter of 2027. Investors fear that the major overhaul of health agencies under Health Secretary Robert F. Kennedy Jr., a longtime vaccine skeptic, along with cuts to federal research grants and other policy changes, could delay drug approvals and trigger a substantial biotech selloff. The S&P Biotech ETF (XBI.P), opens new tab is down about 6.4% this year and is trading at less than half its 2021 peak. Shares of Recursion have fallen 21% so far this year. While Recursion, which uses artificial intelligence to discover new drug candidates, isn't as affected as other biotech firms, raising money and securing partnerships remain challenging, Gibson said.
CNBC
06-06-2025
- Business
- CNBC
JPMorgan's top biotech and pharma picks for the second half
Biopharmaceutical stocks' underperformance versus the broader market for a third-straight year is an opportunity for investors, according to JPMorgan. Analyst Chris Schott said in the firm's June outlook for biopharma that the sector's poor performance can be traced back to concerns over President Donald Trump's tariffs and his " most favored nation " executive order. The SPDR S & P Biotech ETF (XBI) has pulled back about 7% so far in 2025, while the S & P 500 has notched a nearly 2% gain. The stock action is overdone, according to Schott, as he expects any impact from this policy will be "manageable." Valuations are historically depressed, Schott said, which means the sector has already priced in the the worst possible outcome. "The sector [should be] able to largely mitigate the impact of tariffs in the mid/long term through manufacturing repatriation and 2) [there's] no clear path for MFN ["most favored nation"] to move forward without Congressional approval (outside of IRA price negotiations)," Schott said. Fundamentals for biopharma stocks have improved in recent years, which should support "a more manageable sales/EPS erosion outlook for most names," he added. Here's a look at some of JPMorgan's favorite biotech and pharma stocks heading into the second half of the year. All stocks on the list are rated overweight by the firm. Eli Lilly stock is among JPMorgan's top picks among the group. Shares are about flat in 2025, and have slipped roughly 8% over the past 12 months. The company agreed to purchase SiteOne Therapeutics in a roughly $1 billion deal last week , which could allow Lilly to develop non-opioid treatments for chronic pain conditions. LLY YTD mountain Eli Lilly stock in 2025. Developing non-opioid pain drugs is a key focus for the industry, with Vertex Pharmaceuticals recently approving its Journavx Nav1.8 inhibitor. About 84% of analysts polled by FactSet maintain a buy rating on Eli Lilly stock, with their consensus price target equating to nearly 29% upside. Gilead Sciences is also one of JPMorgan's top picks. Shares have soared more than 20% so far in 2025. GILD YTD mountain Gilead Sciences stock in 2025. Analysts surveyed by FactSet think the stock has more room to run after a strong first half of the year. Alongside a consensus buy rating, the average analyst price target calls for more than 5% upside. The company recently announced key phase three trial data tied to its Trodelvy cancer treatment that showed the drug lowered the risk of a severe form of breast cancer when used in combination with Merck 's Keytruda immunotherapy treatment. Other names on the list include Regeneron Pharmaceuticals and Bristol Myers Squibb .
CNBC
28-05-2025
- Business
- CNBC
These biotech stocks will benefit as generative AI speeds up drug discovery, Jefferies says
Investors are underappreciating the impact generative artificial intelligence will have on biotech stocks, according to Jefferies. Biotech stocks have had a challenging couple of years, falling into a correction after an initial surge at the onset of the coronavirus pandemic, as they navigated a higher interest rate environment. More recently, tariffs and staffing reductions at the U.S. Department of Health and Human Services have also hit the sector. The SPDR S & P Biotech ETF (XBI) is down more than 11% in 2025, while the S & P 500 has eked out a slight gain. XBI YTD mountain XBI Nevertheless, the sector is set to get a boost from the adoption of generative AI in drug discovery, which Michael Yee, senior biotech analyst at Jefferies, said will save companies years and billions of dollars in getting new drugs to market. "We know that biotech is a billion dollars to find a drug, up to 10 years to get a drug to market, and 90% of drugs fail," Yee told CNBC's David Faber on "Squawk on the Street" on Wednesday. "So, we think that based on analysis and some of the technologies these companies are doing, you can cut the drug time by years, and cut the probabilities significantly in half to get drugs to market, and that can save billions of dollars and increase the odds of success and return on investment for companies and investors." "It is very early stage, and we're out there saying, five years from now, we think we'll see tremendous progress in drugs that are in the clinic from test tubes today that were basically done using generative AI," Yee continued. "We can cut a 10 year process, we'd be down to seven of eight years." To be sure, there are some near-term regulatory challenges the sector is facing, but Yee said he expects that any downside from negative headlines is already priced into the stocks. "We're actually optimistic for the rest of the year," he said. Here are some stocks poised to benefit: Amgen , one of the world's largest biotech companies, is one firm integrating generative AI to analyze human datasets for its research. The buy-rated stock is up 7% this year, according to the CNBC analyst consensus tool. Software company Schrodinger is set to benefit from increased research and development spending, using machine learning in drug discovery programs. The stock is up 11% this year. Illumina , which develops systems for genetic variation analysis, and Danaher, a life sciences and diagnostics company, are two other companies to benefit. The stocks are down 38% and 17% this year, respectively.
