IBB Looks Ripe For A Turnaround In 2017

Noah Kiedrowski - INO.com Contributor - Biotech


Will the confluence of abating political uncertainty, proposed self-regulation on drug price increases, potential merger and acquisition activity and chronically depressed valuations bode well for IBB in 2017? The biotech cohort saw a very tumultuous 2016 to say the least as the political backdrop, drug pricing debate and presidential election took the headlines. Biotech stocks responded erratically to any news that would have a perceived impact on the cohort during this timeframe. Since Donald Trump voiced his concerns over drug pricing, the initial rally in biotech has largely eroded to pre-election levels. The iShares Biotechnology Index ETF (NASDAQ:IBB) traded in a wide range throughout 2016 with pronounced volatility throughout the presidential election cycle registering a range of ~$240 to $344 or a 104-point range (Figure 1). The upcoming 2017 year is shaping up to be an eventful one with continued uncertainty about the political climate, governmental stance on mergers and acquisitions and potential deregulation. Another hot button issue will be the potential restructuring of the Affordable Care Act and proposed favorable tax and repatriation rates. Continue reading "IBB Looks Ripe For A Turnaround In 2017"

Why The Election Is Not As Relevant To Drug Stocks As You Might Believe

Due to drug pricing controversies, there has been much concern about how the outcome of the upcoming election will affect pharmaceutical stocks. Dr. Len Yaffe of Stoc*Doc Partners sheds light on the issues in this analysis of drug price negotiation policy, and focuses in on one California ballot proposition that aims to rein in costs.

One issue of focus in the election rhetoric is Medicare drug price negotiation, which is specifically precluded in the Medicare Modernization Act of 2003. Furthermore, a noninterference provision was included: Continue reading "Why The Election Is Not As Relevant To Drug Stocks As You Might Believe"