BOSTON (TheStreet) -- Biotech stocks sold off the most in two years Tuesday amidst growing investor concerns that the U.S. government shutdown and looming debt ceiling clash are far from resolved.
The iShares Nasdaq Biotechnology (IBB), the ETF tracking the biotech sector, fell 4.35% to $198.75 Tuesday, far outpacing the 1.23% loss in the S&P 500. The last time the IBB dropped this much in a single day was Oct. 3, 2011, when it lost 4.5%.
Going into today, the IBB was up 52%, so investors appeared to be locking in profits from winning drug and biotech stocks, perhaps in anticipation of a broader market sell off due to the fiscal gridlock in Washington D.C.There has been much debate recently about whether the surging biotech stock valuations was causing a bubble. That debate will only intensify following today's significant. It remains to be seen if Tuesday's downturn is the start of a major valuation correction in biotech or just a pause in buying that will continue through year's end. Acadia Pharmaceuticals (ACAD) and Insys Therapeutics (INSY) -- two of biopharma's best-performing stocks in 2013 -- were among the stocks getting hit the most on Tuesday. Acadia lost 15% to $23.30 while Insys fell 15% to $41.63. Other double-digits losers today included Geron (GERN) (-13%), Prosensa (RNA) (-11%) and Idenix Pharmaceuticals (IDIX) (-16%.) Among big-cap biotechs, Celgene (CELG) lost 3%, Biogen Idec (BIIB) fell 4%, Amgen (AMGN) was down 2% and Gilead Sciences (GILD) shed 3.5%. To put today's biotech selling in further perspective, the IBB has dropped 3% or more in a single day only four times in the past two years. The last occurrence was on Aug. 27. Before that, the IBB lost 3% on Oct. 19, 2012 and June 1, 2012. -- Reported by Adam Feuerstein in Boston. Follow @AdamFeuerstein
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