Chart of Day: SPDR S&P Biotech ETF (XBI) – 1/14

Keep an eye on biotech M&A.

Over the last few days, Merck said it would pay $680 million for Harpoon Therapeutics. Johnson & Johnson also said it would buy Ambrx Biopharma for $2 billion. Both come just weeks after Bristol Myers bought Karuna Therapeutics for $14 billion, and RayzeBio for $4.1 billion. Even AbbVie just bought ImmunoGen for $10.1 billion, and Cerevel Therapeutics for $8.7 billion.

However, this may just be the start of a bigger M&A trend.

In fact, “2024 will likely see a series of new, and significant, merger and acquisition (M&A) deals for biopharma, building on a flurry of buyout announcements seen in the closing weeks of 2023, according to a report released to coincide with the 42nd Annual J.P. Morgan Healthcare Conference,” as reported by Genetic Engineering & Biotechnology News.

One way to trade the excitement is with an ETF, such as the SPDR S&P Biotech ETF (XBI).

With an expense ratio of 0.35%, the ETF offers exposure to the S&P Biotechnology Select Industry Index. Some of its top holdings include Biogen, Veracyte, Moderna, Gilead Sciences, Amgen, and VIR Biotechnology to name a few. The ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Biotechnology Select Industry Index.