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  • Jonathan Poyer

Let's Peek at Biotech Performance: What to Expect After Back-to-Back Down Years?



2021 and 2022 was the first back-to-back negative years for the S&P Biotech Select Industry Index since its inception.


How has biotech performed when it’s had a positive year.


Below is the SP Biotech Select Index (XBI) back to 2007 represented by the XBI: SPDR S&P Biotech ETF.



In this 16-year period, the index was up 11 years. In those 11 years, the average annual return was +28.77% (source: https://www.etfreplay.com/etf/xbi.aspx):

2/3/2023

Q1

Q2

Q3

Q4

Annual

2023

8.90%

2022

-19.72%

-17.37%

6.80%

4.64%

-25.87%

2021

-3.62%

-0.18%

-7.16%

-10.94%

-20.45%

2020

-18.58%

44.59%

-0.39%

26.49%

48.33%

2019

26.19%

-3.13%

-13.06%

24.73%

32.56%

2018

3.44%

8.57%

0.79%

-25.15%

-15.27%

2017

17.18%

11.48%

12.22%

-1.92%

43.77%

2016

-26.32%

4.77%

22.64%

-10.68%

-15.45%

2015

21.06%

12.05%

-25.92%

13.01%

13.58%

2014

9.67%

8.51%

1.65%

19.86%

44.98%

2013

13.67%

4.44%

23.97%

0.84%

48.39%

2012

21.17%

9.96%

5.58%

-5.68%

32.69%

2011

5.85%

9.50%

-18.60%

11.58%

5.26%

2010

11.76%

-13.64%

14.68%

6.25%

17.60%

2009

-10.19%

5.52%

5.94%

-0.03%

0.36%

Continuing to the GFC:

2008

-9.84%

8.89%

4.37%

-10.81%

-8.61%

2007

4.57%

5.70%

14.11%

2.29%

29.02%

It seems like the largest companies are flush with cash and facing pressure from shareholders and management to grow through acquisition. Thus, 2023 could see a nice and continued run of deals.


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