iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) Faces The Downfall


Dallas, Texas 04/03/2014 (FINANCIALSTRENDS) – iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) has been on the top for quite a long time now and recently has taken a U-turn and is heading on a downward spiral. This sudden fall was seen after 17th March when the Democrats’ who were attending the Energy and Commerce Committee meeting, questioned Gilead, the company that sells Hepatitis C drug at an unreasonable price of $84000. They also asked for the explanation on such a huge price that the company had kept which was also affecting the other players in the market.

Investor’s mood reflected on the Index performance of the stock

 iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) saw another setback as the mood of the investors was reflected on the stock’s performance. Immediately after the questioning by the Democrats, the investors pulled back their investments as a result of their misgivings on the stock’s performance. The primary issue they have is the chance of increased risks. Higher regulatory norms are also expected to happen. This will have great impact on the other pharmaceutical companies.

Yet another issue is the price limit as after the political pressure the margins may be pulled down and hence very low or no growth can be seen in these stocks. Things can only improve if there is more transparency created in the sector. There is seen an enormous selling pressure on the stocks for past one week.

The reason behind the downward trend of iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB)

iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) has been seeing this downward trend because of Gilead Sciences but the latter is in fact earning profits because of that. As the drug Solvadi is being sold high amounts for past many days. Only with the sale of this single drug for past few weeks the Q1revenue has been reported as$1.4 B USD. It is reported that there are funds coming in from the French government for another biotechnology stock called AlexionPharma.