The great biotechnology sell-off of 2014 began on Feb. 26 and started as big sell-offs often do: quietly.
The SPDR S&P Biotechnology exchange-traded fund (NYSE: XBI) peaked at $172.52 and closed at $170.01, off 40 cents from the day before. The next day, the ETF finished at a record close of $170.66 but dropped pretty consistently thereafter. Between Feb. 25 and Monday, the ETF had suffered losses on 20 of 29 days -- and had dropped 22.8% in the process.
It's been a shocking decline, but should not have surprised anyone. The ETF had risen 48% in 2012 and added an additional 31% in 2014 before the blow-off erupted.
See also: Despite S&P 500's New High, Stocks Face Challenges
Since the selling took hold, the slump has battered biotechs of all sizes. Share prices fell steadily through March and into April. It's not clear if the selling is over, although shares of a number of large biotech companies rebounded on Monday, including Gilead Sciences (NASDAQ: GILD), Celgene Corp. (NASDAQ: CELG), Biogen Idec (NASDAQ: BIIB) and Regeneron Pharmaceuticals (NASDAQ: REGN).
One issue that's pressuring the stocks is the big wave of biotech initial public offerings. Some 45% of all IPOs that went to market in the first quarter were biotech companies.
Lots of Biotech IPOs
Of these, none was actually making money; half had no revenue at all. But, The New York Times noted, the companies were valued at a ...
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