Biotech Sees Massive Selling... Again (IBB)
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Biotech stocks are under heavy pressure again Tuesday, with the iShares Nasdaq Biotechnology (NASDAQ: IBB) down 6.2% mid-day.
The weakness is being driven by a negative WSJ article on drug pricing - citing Biogen's (NASDAQ: BIIB) Avonex drug - and the Illumina (NASDAQ: ILMN) Q3 warning among other items, according to analysts.
The WSJ article in question noted continual price hikes from Biogen related to its Avonex multiple sclerosis drug. Biogen has hiked the price of Avonex on average of 16 percent per year over the last decade, for a total of 21 separate times. The move comes as demand for the drug keeps slipping. Biogen isn't alone; in considering 30 of the top-selling drugs on the U.S., revenue growth has outpaced demand over the last five years, rising 61 percent, or three-times that of prescription drug increases, the report said.
Meanwhile, Illumina said it sees third quarter revenue of approximately $550 million, which was below the consensus of $570 million. In the fourth quarter, the company sees revenue of $570 million versus the consensus of $603 million. The company said instrument sales in the desktop family underperformed expectations and they were disappointed with instrument sales in Europe and continued weakness in the Asia-Pacific region.
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