(Bloomberg) -- A biotechnology ETF extended losses Monday, erasing the last remnants of the rally that had made it one of the market darlings during the worst days of the pandemic.
The closely watched SPDR S&P Biotech exchange-traded fund, known by its XBI ticker, has now lost more than 60% since its February 2021 peak and is now on track to close at its lowest since early 2017. The 15-month slide is the longest selloff since the equal-weighted fund’s inception in 2006. The ETF fell 8.2% on Monday, the biggest drop since March 2020, to close at its lowest level since January 2017.
Concerns over rising interest rates and a slowdown in growth has hit risky biotech bets -- many of which are now trading below their cash value. More than half the stocks in the 370 member Nasdaq Biotechnology Index traded at 52-week lows or worse on Monday.
Some of the worst performers were Endo International Plc -- at a record low after reporting flagging sales -- and Guardant Health Inc., which extended its plunge after a key trial for its cancer tests was delayed.
Wall Street isn’t holding out for a recovery in the sector anytime soon.
“The bar for a sustained XBI recovery (beyond aggressive spurts of short squeezes) feels like it could be creeping higher even as the index continues to bleed lower,” writes Goldman Sachs strategist Asad Haider.
Amid a sea of red some of the vaccine makers, led by BioNTech SE, which reported first-quarter sales that topped analyst estimates, and Moderna Inc. were at least able to eke out some gains.
BioNTech advanced 3.1%, while Moderna gained 1.1%. Moderna, BioNTech and partner Pfizer are pushing for progress on new variant-specific shots as the virus continues to mutate.
(Updates to closing prices, adds Monday’s decline.)
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