By Michael Johnston, founder of
Weightings given to some of the year's top-performing stocks are all over the board for the various biotech ETFs; the companies highlighted below are among the top components of some funds and are excluded altogether from others.
- Sequenom (SQNM): Shares of this genetics analysis and testing firm have surged this year on analyst upgrades. Sequenom shares plunged last year after mishandling of data surrounding a non-invasive diagnostic test for Down Syndrome, but have reclaimed much of their lost ground in 2010.
- OSI Pharmaceuticals (OSIP): Shares of the maker of cancer drug Tarceva have gained more than 80% so far in 2010 after Japan's Astellas Pharma launched an unsolicited $3.5 billion takeover offer.
- Millipore (MIL): This biotech equipment maker has been the subject of speculation in recent weeks. Following reports that Thermo Fisher Scientific had made a takeover bid, it emerged over the weekend that Germany's Merck KGaA had agreed to buy the company for just over $6 billion. Shares of MIL have gained nearly 50% so far this year.
- InterMune (ITMN): After trading in a relatively tight range for most of the year, ITMN surged nearly 60% last week after the drug developer said it will meet with an FDA panel to discuss Pirfenidone, a drug designed to treat a rare chronic lung disease.
A quick look at the weightings given to each of these companies by the four major biotech ETFs sheds some light on the big gaps in year-to-date performance.