SPDR S&P Pharmaceuticals ETF (ARCA:XPH), Quote.Headers.trade-ideas

SPDR S&P Pharmaceuticals ETF

Healthcare

Technology

Industrials

Financial Services

Consumer Cyclical

Energy

Communication Services

Consumer Defensive

Real Estate

Other

Utilities

Basic Materials

In seeking to track the performance of the S&P Pharmaceuticals Select Industry Index (the index), the fund employs a sampling strategy. It generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. The index represents the pharmaceuticals segment of the S&P Total Market Index (S&P TMI).

Axsome Therapeutics, Inc.

Viatris Inc.

Intra-Cellular Therapies Inc

Bristol-Myers Squibb Co.

Pfizer, Inc.

Corcept Therapeutics Inc

Johnson & Johnson

Organon & Co

Catalent, Inc.

Zoetis, Inc.

Earnings

Earnings Beats

Large Cap

News

Sector ETFs

Guidance

Health Care

Markets

Analyst Ratings

Trading Ideas

ETFs

General

FTXH

iShares Dow Jones US Pharmaceuticals Index Fund

Merrill Lynch Pharmaceutical HOLDRs Trust

The second-quarter results of the healthcare sector have been impressive, with earnings of 78.8% of the sector participants that have reported so far up 17.1% on 7.6% revenue growth. The earnings beat ratio of 85.7% and the revenue beat ratio of 75.5% are also assuring.

Pharma ETFs in Focus Post Solid Q2 Earnings

Ogden,Utah,Usa:,October,27,2020-,Oxycontin,Bottle,On,Counter.,Purdue

Legal

Purdue Pharma Bankruptcy Plan Rejected by Supreme Court, Billionaire Sacklers to Face Lawsuits

The first-quarter results of the healthcare sector have been unimpressive, with earnings of 78% of the sector participants that have reported so far down 31.2% despite 4.4% revenue growth. The earnings beat ratio of 93.9% and the revenue beat ratio of 75.8% are assuring, though.

A Look at Pharma ETFs Post Q1 Earnings

The second-quarter results of the healthcare sector have been impressive, with earnings of 78.8% of the sector participants that have reported so far up 17.1% on 7.6% revenue growth. The earnings beat ratio of 85.7% and the revenue beat ratio of 75.5% are also assuring. Combining the actual results with the estimates for the still-to-report companies, the total earnings of the sector are expected to grow 16.6% on revenue growth of 8.5%.
Many industry bigwigs reported solid results, with some beating on earnings or revenues or both. However, the recent market rout has eroded some gains from the sector. As such, pharma ETFs have delivered mixed performances over the past month. iShares U.S. Pharmaceuticals ETF (ARCA:IHE), VanEck Vectors Pharmaceutical ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pph#NASDAQ">PPH</a>), SPDR S&amp;P Pharmaceuticals ETF (ARCA:XPH) and First Trust Nasdaq Pharmaceuticals ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ftxh#NASDAQ">FTXH</a>) have gained 0.3%, 1.1%, 0.07%, and 0.4% respectively, while Invesco Pharmaceuticals ETF (ARCA:PJP) has shed 0.1% in a month.
Let&#39;s delve deeper into the earnings of some of the bigwigs:
<h3>Earnings in Focus</h3>
Johnson and Johnson 
Johnson &amp; Johnson (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jnj#NYSE">JNJ</a>) continued with its long streak of earnings beat and also outpaced revenue estimates. Earnings per share came in at $2.82, beating the Zacks Consensus Estimate of $2.71 and improving 10.2% from the year-ago quarter. Revenues grew 4.3% year over year to $22.45 billion and fell short of the Zacks Consensus Estimate of $22.38 billion. For 2024, Johnson &amp; Johnson maintained its revenue guidance of $88-$88.4 billion, indicating year-over-year growth of 4.7%-5.2%. It lowered adjusted earnings per share guidance from $10.57-$10.72 to $9.97-$10.07. 
Pfizer 
Pfizer (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pfe#NYSE">PFE</a>) topped estimates on both the top and bottom lines. It reported adjusted earnings per share of 60 cents, which beat the Zacks Consensus Estimate of 45 cents per share but declined 11% year over year. Revenues inched up 2% year over year to $13.28 billion and edged past the consensus mark of $13.13 billion. The U.S. drug giant raised its revenue guidance from $58.5-$61.5 billion to $59.5-$62.5 billion and adjusted earnings per share from $2.15-$2.35 to $2.45-$2.65 for 2024. 
Merck 
Merck (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mrk#NYSE">MRK</a>) also topped earnings and revenue estimates. It posted earnings per share of $2.28, which surpassed the Zacks Consensus Estimate of $2.16. In the year-ago period, the company had incurred an adjusted loss of $2.06 per share. Revenues rose 79% year over year to $16.11 billion and edged past the consensus mark of $15.90 billion. Merck lifted the higher end of its revenue guidance from $63.1-$64.3 billion to $63.1-$64.4 billion but lowered the earnings per share guidance to $7.94-$8.04 from $8.53-$8.65. 
Bristol-Myers 
Bristol-Myers (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bmy#NYSE">BMY</a>) also reported better-than-expected results. It posted an earnings per share of $2.07, outpacing the Zacks Consensus Estimate of $1.64. Earnings came in higher than the year-ago earnings of $1.75. Revenues grew 9% year over year to $12.2 billion and edged past the Zacks Consensus Estimate of $11.5 billion. For 2024, Bristol-Myers now expects revenues to increase in the upper end of the low single-digit range versus the previous guidance of low single digits.&nbsp; It lifted its earnings per share guidance to 60-90 cents from 40-70 cents. 
Eli Lilly and Company 
Eli Lilly and Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lly#NYSE">LLY</a>) reported robust second-quarter 2024, beating earnings and revenue estimates. Earnings per share came in at $3.92, surpassing the Zacks Consensus Estimate of $2.64 and improving 86% from the year-ago number. Revenues rose 36% to $11.3 billion and edged past the estimated $9.83 billion. Eli Lilly increased its full-year outlook for the second time this year. It raised the revenue guidance to $45.4-$46.6 billion from $42.4-$43.6 billion and the adjusted earnings per share guidance to $16.10-$16.60 from $13.50-$14.00.
<h3>ETF Angle</h3>
iShares U.S. Pharmaceuticals ETF
iShares U.S. Pharmaceuticals ETF provides exposure to 36 U.S. companies that manufacture prescription or over-the-counter drugs or vaccines by tracking the Dow Jones U.S. Select Pharmaceuticals Index. The in-focus five firms are the top holdings in the basket, accounting for a combined 59.4% of the total assets, suggesting heavy concentration. iShares U.S. Pharmaceuticals ETF has $670.8 million in AUM and charges 39 bps in fees and expenses. It carries a Zacks ETF Rank #3 (Hold) with a High risk outlook. 
VanEck Vectors Pharmaceutical ETF
VanEck Vectors Pharmaceutical ETF follows the MVIS US Listed Pharmaceutical 25 Index and holds 26 stocks in its basket. The five firms collectively account for a 33.6% share in the fund&#39;s basket. The product has amassed $678.1 million in its asset base and charges 36 bps in annual fees. VanEck Vectors Pharmaceutical ETF carries a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
SPDR S&amp;P Pharmaceuticals ETF
SPDR S&amp;P Pharmaceuticals ETF provides exposure to pharma companies by tracking the S&amp;P Pharmaceuticals Select Industry Index. With AUM of $177.9 million, it holds 43 securities, with the in-focus firms making up about 4% share each. SPDR S&amp;P Pharmaceuticals ETF charges 35 bps in fees a year and has a Zacks ETF Rank #3 with a High risk outlook.
Invesco Pharmaceuticals ETF
Invesco Pharmaceuticals ETF offers exposure to companies that are principally engaged in the research, development, manufacture, sale, or distribution of pharmaceuticals and drugs of all types. It follows the Dynamic Pharmaceuticals Intellidex Index and holds 23 stocks in its basket, with the in-focus firms making up at least 5% share each. Invesco Pharmaceuticals ETF has AUM of about $283.8 million and charges 57 bps in fees and expenses. The ETF has a Zacks ETF Rank #3 with a High risk outlook.
First Trust Nasdaq Pharmaceuticals ETF
First Trust Nasdaq Pharmaceuticals ETF tracks the Nasdaq US Smart Pharmaceuticals Index, holding 50 securities in its basket. The in-focus five firms account for a combined 31.4% of the assets. FTXH has AUM of $18.3 million. First Trust Nasdaq Pharmaceuticals ETF charges 60 bps in annual fees and has a Zacks ETF Rank #3.
<a href="https://www.zacks.com/stock/news/2322190/pharma-etfs-in-focus-post-solid-q2-earnings?cid=CS-BENZ-FT-etf_news_and_commentary-2322190">To read this article on Zacks.com click here.</a>

The Supreme Court has rejected a bankruptcy plan for OxyContin-maker Purdue Pharma that would have allocated billions from the wealthy Sackler family to combat opioid addiction, and the Sacklers would have been shielded from civil lawsuits related to their alleged <a target="_blank" href="https://www.benzinga.com/government/23/12/36072366/opioid-crisis-and-corporate-accountability-purdues-settlement-in-the-spotlight" rel="noreferrer noopener">role in the opioid crisis</a>.
The 5-4 decision marks a victory for a minority of opioid victims who voted against the settlement to continue pressing lawsuits against the Sackler family.
It is a setback for most victims and state and local governments who have <a target="_blank" href="https://www.benzinga.com/general/biotech/23/08/34064098/purdue-pharmas-trust-strategy-supreme-court-reviews-restructuring-amidst-opioid-crisis" rel="noreferrer noopener">accepted the settlement</a>.
The Wall Street Journal notes the ruling is among the highest-profile bankruptcy decisions ever from the high court, significantly weakening the ability of corporations and their insiders to use bankruptcy to resolve mass litigation.
Purdue Pharma, which introduced OxyContin in the late 1990s and made billions from the prescription painkiller, faced thousands of opioid lawsuits by 2019.
The company filed for Chapter 11 protection, though the Sackler family did not declare bankruptcy and moved much of their wealth to offshore trusts.
They agreed to pay $6 billion to settle civil claims, denying wrongdoing and arguing their settlement was the best way to fund <a target="_blank" href="https://www.benzinga.com/government/23/08/33748967/sackler-familys-6b-commitment-in-spotlight-supreme-court-suspends-purdue-pharmas-settlement-over-opi" rel="noreferrer noopener">addiction-fighting initiatives</a>.
In 2021, a New York bankruptcy court approved a reorganization <a target="_blank" href="https://www.benzinga.com/markets/cannabis/21/07/21902857/15-states-settle-with-opioid-maker-purdue-pharma-for-4-5b-the-most-that-individuals-have-ever-pa" rel="noreferrer noopener">plan for Purdue</a>.
The WSJ report <a target="_blank" href="https://www.wsj.com/us-news/law/supreme-court-rejects-purdue-pharma-deal-to-shield-sackler-family-7870205a?mod=hp_lead_pos1" rel="noreferrer noopener">added</a> that this plan included funds from the Sacklers&#8217; offshore trusts and ceded the company and its assets to creditors.
Most funds would go to state and local governments for opioid-related programs, with $750 million shared among roughly 130,000 individual opioid claimants.
While nearly all claimants accepted the plan, it required dissenters to accept immunity for the Sacklers from ongoing and future litigation, which many viewed as inadequate compensation.
The Justice Department opposed Purdue&#8217;s plan, arguing it would unlawfully extinguish individuals&#8217; rights to pursue civil lawsuits.
The Office of the U.S. Trustee appealed to the Supreme Court, stating that the plan gave the Sacklers an unprecedented release from liability.
Purdue lawyers argued that the third-party release was necessary under U.S. bankruptcy law to secure the Sacklers&#8217; $6 billion contribution.
Purdue lawyer Gregory Garre stated that blocking the settlement would result in the evaporation of funds for opioid abatement and compensation, leaving creditors and victims with nothing and potentially costing lives.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock

The first-quarter results of the healthcare sector have been unimpressive, with earnings of 78% of the sector participants that have reported so far down 31.2% despite 4.4% revenue growth. The earnings beat ratio of 93.9% and the revenue beat ratio of 75.8% are assuring, though. Combining the actual results with the estimates for the still-to-report companies, the total earnings of the sector are expected to decline 25.1% despite revenue growth of 7.1%. 
However, many industry bigwigs reported solid results, with some beating on earnings or revenues or both. As such, pharma ETFs have delivered mixed performances over the past month. iShares U.S. Pharmaceuticals ETF (ARCA:IHE), VanEck Vectors Pharmaceutical ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pph#NASDAQ">PPH</a>), SPDR S&amp;P Pharmaceuticals ETF (ARCA:XPH) and First Trust Nasdaq Pharmaceuticals ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ftxh#NASDAQ">FTXH</a>) have lost 3.7%,1.9%, 2.9%, and 3.1% respectively, while Invesco Pharmaceuticals ETF (ARCA:PJP) has added 0.8% in a month. 
Let&#39;s delve deeper into the earnings of some of the bigwigs:
<h3>Earnings in Focus</h3>
Johnson and Johnson 
Johnson &amp; Johnson (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jnj#NYSE">JNJ</a>) continued with its long streak of earnings beat but lagged revenue estimates. Earnings per share came in at $2.71, beating the Zacks Consensus Estimate of $2.64 and improving 12.4% from the year-ago quarter. Revenues grew 2% year over year to $21.38 billion and fell short of the Zacks Consensus Estimate of $21.4 billion. For 2024, Johnson &amp; Johnson revised its guidance from $88.2-$89.0 billion to $87.8-$88.6 billion, indicating year-over-year growth of 5.5%-6.0%. The adjusted earnings per share guidance was tightened from $10.55-$10.75 to $10.57 to $10.72. 
Pfizer 
Pfizer (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pfe#NYSE">PFE</a>) topped estimates on both the top and bottom lines. It reported adjusted earnings per share of 82 cents, which beat the Zacks Consensus Estimate of 56 cents per share but declined 33% year over year. Revenues declined 20% year over year to $14.88 billion and fell short of the consensus mark of $13.96 billion. The U.S. drug giant reaffirmed its revenue guidance of $58.5-$61.5 billion and raised its adjusted earnings per share to $2.15-$2.35 from $2.05-$2.25 for 2024. 
Merck 
Merck (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mrk#NYSE">MRK</a>) also topped earnings and revenue estimates. It posted earnings per share of $2.07, which surpassed the Zacks Consensus Estimate of $1.94 and increased 48% from the year-ago earnings. Revenues rose 9% year over year to $15.78 billion and edged past the consensus mark of $15.37 billion. Merck lifted the lower end of its revenue guidance. It now expects revenues in the range of $63.1-$64.2 billion from $62.7-$64.2 billion, while earnings per share are expected in the range of $8.53-$8.65 versus the prior expectation of $8.44-$8.59. 
Bristol-Myers 
Bristol-Myers (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bmy#NYSE">BMY</a>) also reported better-than-expected results. It posted a loss per share of $4.40, narrower than the Zacks Consensus Estimate of a loss of $4.53 per share. In the year-ago quarter, BMY posted adjusted earnings per share of $2.05. Revenues grew 5% year over year to $11.86 billion and edged past the Zacks Consensus Estimate of $11.46 billion. For 2024, Bristol-Myers expects revenues to increase in the low single digits while earnings per share are expected in the band of 40 cents to 70 cents, down from the earlier estimate of $7.10-$7.40, to reflect the dilutive impact of recent acquisitions and collaborations. 
Eli Lilly and Company 
Eli Lilly and Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lly#NYSE">LLY</a>) posted mixed first-quarter 2024 earnings, beating earnings estimates but lagging on revenues. Earnings per share came in at $2.58, surpassing the Zacks Consensus Estimate of $2.53 and improving 59% from the year-ago number. Revenues rose 26% to $8.77 billion but fell short of the estimated $8.81 billion. Eli Lilly raised the 2024 revenue guidance to $42.4-$43.6 billion from $40.4-$41.6 billion, while the adjusted earnings per share guidance was upped to $13.50-$14.00 from the prior projection of $12.20-$12.70.
<h3>ETF Angle</h3>
iShares U.S. Pharmaceuticals ETF 
iShares U.S. Pharmaceuticals ETF provides exposure to 34 U.S. companies that manufacture prescription or over-the-counter drugs or vaccines by tracking the Dow Jones U.S. Select Pharmaceuticals Index. The in-focus five firms are the top holdings in the basket, accounting for a combined 59% of the total assets, suggesting heavy concentration. iShares U.S. Pharmaceuticals ETF has $654.8 million in AUM and charges 40 bps in fees and expenses. It carries a Zacks ETF Rank #2 (Buy) with a High risk outlook. 
VanEck Vectors Pharmaceutical ETF 
VanEck Vectors Pharmaceutical ETF follows the MVIS US Listed Pharmaceutical 25 Index and holds 26 stocks in its basket. The five firms collectively account for a 33.2% share in the fund&#39;s basket. The product has amassed $512.7 million in its asset base and charges 36 bps in annual fees. VanEck Vectors Pharmaceutical ETF carries a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. 
SPDR S&amp;P Pharmaceuticals ETF 
SPDR S&amp;P Pharmaceuticals ETF provides exposure to pharma companies by tracking the S&amp;P Pharmaceuticals Select Industry Index. With AUM of $197.9 million, it holds 41 securities, with the in-focus firms making up about 4% share each. SPDR S&amp;P Pharmaceuticals ETF charges 35 bps in fees a year and has a Zacks ETF Rank #3 with a High risk outlook. 
Invesco Pharmaceuticals ETF 
Invesco Pharmaceuticals ETF offers exposure to companies that are principally engaged in the research, development, manufacture, sale, or distribution of pharmaceuticals and drugs of all types. It follows the Dynamic Pharmaceuticals Intellidex Index and holds 24 stocks in its basket, with the in-focus firms making up at least 5% share each. Invesco Pharmaceuticals ETF has AUM of about $270.2 million and charges 57 bps in fees and expenses. The ETF has a Zacks ETF Rank #3 with a High risk outlook. 
First Trust Nasdaq Pharmaceuticals ETF 
First Trust Nasdaq Pharmaceuticals ETF tracks the Nasdaq US Smart Pharmaceuticals Index, holding 50 securities in its basket. The in-focus five firms account for a combined 32.2% of the assets. FTXH has AUM of $19.9 million. First Trust Nasdaq Pharmaceuticals ETF charges 60 bps in annual fees and has a Zacks ETF Rank #2 (Buy).
<a href="https://www.zacks.com/stock/news/2269782/a-look-at-pharma-etfs-post-q1-earnings?cid=CS-BENZ-FT-etf_news_and_commentary-2269782">To read this article on Zacks.com click here.</a>

Organon &amp; Co&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OGN#NYSE">OGN</a>) reported a 5% Y/Y increase in the first quarter of 2024 revenue, reaching around $1.622 billion, beating&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/05/b38578813/organon-reports-results-for-the-first-quarter-ended-march-31-2024" rel="noreferrer noopener">the&nbsp;consensus of $1.563 billion</a>.
Women&#8217;s Health revenue increased by 11% as reported and 12% ex-FX, driven by 34% ex-FX growth in&nbsp;Nexplanon&nbsp;led by favorable customer purchasing patterns associated with the timing of U.S. list-price adjustments, coupled with favorable price and discount rates in the U.S. and the favorable timing of tenders to markets outside of the U.S.
Biosimilar revenue surged by 46% reported and ex-FX,&nbsp;aided by&nbsp;Ontruzant, which benefited from incremental demand from a tender in Brazil&nbsp;and&nbsp;Renflexis,&nbsp;which gained from continued demand growth in the&nbsp;U.S&nbsp;and Canada.
Established Brands remained&nbsp;flat Y/Y on an as-reported basis&nbsp;and grew&nbsp;2% Y/Y ex-FX&nbsp;as&nbsp;contribution&nbsp;from the recent licensing of&nbsp;Emgality&nbsp;and&nbsp;Rayvow along&nbsp;with a recovery in certain injectable steroid products following last year&#8217;s market action offset the impacts of Volume Based Procurement initiatives in China.&nbsp;
For the first quarter,&nbsp;Organon reported an adjusted gross margin of 62.1% vs. 65.2% a year ago.
Adjusted EBITDA margin contracted to 33.2% from 33.7% in&nbsp;the prior&nbsp;year&nbsp;quarter&nbsp;due to cost containment initiatives targeting operating expenses.
The company reported adjusted EPS of $1.22, beating the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/earnings" rel="noreferrer noopener">consensus of $0.93</a>.
As of March-end, cash and cash equivalents were $575 million, and debt was $8.7 billion.
Dividend: The Board of Directors declared a quarterly dividend per sharer of $0.28, payable on June 13 to stockholders of record as of May 13.
FY24 Guidance Reaffirmed:&nbsp;It forecasts revenue of $6.2 billion-$6.5 billion versus the consensus of $6.37 billion and&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">adjusted EBITDA margin of 31.0%-33.0%</a>.
Investors can gain exposure to the stock via&nbsp;SPDR S&amp;P Pharmaceuticals ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XPH#NYSE">XPH</a>) and&nbsp;Invesco S&amp;P SmallCap Health Care ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PSCH#NASDAQ">PSCH</a>).
Price Action: OGN shares are up 2.18% at $19.24 at the last check Thursday.
Photo via Shutterstock

Equities

Mid Cap

PSCH

Organon Beats On Q1, Women's Health Leads the Charge

These three pharmaceutical ETFs have dropped to support, which means they may be about to rebound.
Support is a large concentration of buyers who have gathered around the same price level. At support levels, there is more demand for the stock than there is supply.
Downtrends end when they reach support levels.
Many times, stocks rally off of support levels. This happens when some of the buyers become more aggressive. They don&rsquo;t want the other buyers to get ahead of them in line. They decide to pay higher prices.
This forces the stock into rally mode.
See Also: <a href="https://www.benzinga.com/trading-ideas/long-ideas/21/04/20625716/3-short-squeeze-candidates-in-the-media-sector">3 Short Squeeze Candidates In The Media Sector</a>
The SPDR S&amp;P Pharmaceuticals ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xph#NYSE">XPH</a>) has dropped to the $47.85 level. This level was support in November and December. It was&nbsp;the base for a large move higher into January. It could happen again.
<img alt="xph.png" src="https://www.benzinga.com/files/u344550/xph.png" style="height:400px; width:640px" />
The Global X Cannabis ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/potx#NYSE">POTX</a>) has reached the $14 level once again. After finding support at this level in January and March, the ETF rallied. There&rsquo;s a chance it happens again.
<img alt="potx.png" src="https://www.benzinga.com/files/u344550/potx.png" style="height:400px; width:640px" />
&nbsp;
The Direxion Daily Pharmaceutical &amp; Medical Bull 3X Shares ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pill#NYSE">PILL</a>) has found support at the $19.50 level. This level was support in November and December. It was the base for a significant move higher.
<img alt="pill.png" src="https://www.benzinga.com/files/u344550/pill.png" style="height:400px; width:640px" />

Long Ideas

Specialty ETFs

Technicals

PILL

POTX

3 Pharmaceutical ETFs That Could Be Due For A Rebound

The pharmaceutical industry has delivered a&nbsp;C$1 billion ($761 million) proposal to the Canadian government in an attempt to stave off an&nbsp;upcoming price crackdown, Reuters&nbsp;<a href="https://www.reuters.com/article/us-canada-pharmaceuticals-exclusive/exclusive-drugmakers-offer-canada-c1-billion-to-scrap-some-pending-pricing-rules-idUSKBN27V0EY?il=0" target="_blank">reported</a>&nbsp;on Sunday, based on documents the news agency has reviewed.
What Happened: The industry offered to spend C$1 billion dollar ($761 million) over the next 10 years on developing ways to improve access to drugs for rare diseases and to improve local manufacturing and commercialization.
The drug pricing regulations, to go in&nbsp;effect on Jan. 1,&nbsp;threaten the industry&rsquo;s growth, pharmaceutical companies say. They say the uncertainty and complex cost-benefit analysis the new rules will bring about will discourage them from developing new drugs in the country.
Why It Matters: Under the new rules, Canada's Patented Medicine Prices Review Board will be able to review the cost effectiveness of new drugs and the impact they might have on government budgets.
The board will no longer use the United States and Switzerland as a benchmark to set some maximum prices and will take other countries with lower prices into consideration.
&ldquo;The position of the Government of Canada remains unchanged &mdash; Canada has among the highest patented medicine prices in the world, and these high prices negatively affect the ability of patients to access new medicines,&rdquo; said the health minister office in a statement.&nbsp;
What&#39;s Next: Canada&rsquo;s pharmaceutical lobby group, Innovative Medicines Canada (IMC), said it had a meeting with the minister of health and provided a written proposal but has received no answer so far.&nbsp;

Biotech

Government

Regulations

Global

Media

Big Pharma In Canada Offers C$1B In Last Attempt To Stop Drug Pricing Crackdown

On <a href="https://www.cnbc.com/video/2019/09/25/final-trades-jpmorgan-skyworks-marathon-and-more.html">CNBC&#39;s &quot;Fast Money Halftime Report,&quot;</a>&nbsp;Joe Terranova said that JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>) is going to trade higher, toward$125.
Meghan Shue is a buyer of Communication Services Select Sector SPDR Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xlc#NYSE">XLC</a>).
Anastasia Amoroso wants to buy SPDR S&amp;P Pharmaceuticals (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xph#NYSE">XPH</a>) on a pullback. She doesn&#39;t think anything is going to happen about drug pricing in Congress.
Stephen Weiss likes Skyworks Solutions Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/swks#NASDAQ">SWKS</a>) on the news that Apple brought production of the Mac back to the United States.
Pete Najarian noticed unusual options activity in Marathon Petroleum Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mpc#NYSE">MPC</a>). He has a long position in the name.
&nbsp;

SWKS

'Fast Money Halftime Report' Picks For September 25

iShares Trust Dow Jones US Healthcare Sector Index Fund

From Sohn Conference: Larry Robbins Recommends Shorting A Pharma ETF, But Doesn't Specifically Mention 1 ETF; BZ NOTE: The SPDR S&P Pharma ETF Is Ticker 'XPH'

July was&nbsp;kind to the U.S. stock market even amid escalating trade tensions and rounds of tech sell-off. The Dow Jones Industrial Average recorded the largest monthly gain of 4.7 percent&nbsp;since January while the S&amp;P 500 and the Nasdaq Composite Index logged&nbsp;their fourth consecutive monthly gains at&nbsp;3.6 percent&nbsp;and 2.2 percent, respectively.
A string of earnings and revenue beats drove the markets higher. Additionally, accelerating economic growth and reports of renewed trade negotiations between the United States and China added to further strength.
A few sectors easily crushed the market in July. Below we have highlighted sector ETFs that witnessed handsome gains last month and could be better plays in the months ahead should the trends prevail.
U.S. Global Jets ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jets#NYSE">JETS</a>)
Airline stocks were on tear last month buoyed by strong earnings, a busy summer travel season&nbsp;and moves to trim capacity growth and cut non-fuel costs. As such, JETS emerged as the biggest winner in July, gaining 8.4&nbsp;percent. The fund provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index.
In total, the ETF&nbsp;holds 34 securities that are heavily concentrated on the top four firms with double-digit allocation each. Other firms comeprise no more than 4.6 percent. The fund has gathered $98.1 million in its asset base while sees lower trading volume of nearly 29,000 shares a day. It charges investors 60 bps in annual fees.
Alerian MLP ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/amlp#NYSE">AMLP</a>)
Master limited partnerships,&nbsp;or MLPs, rallied on robust drilling activity, strong earnings&nbsp;and the new Federal Energy Regulatory Commission ruling related to the treatment of income taxes for interstate natural gas pipeline operators that has offered them some relaxation. This fund tracks the Alerian MLP Infrastructure Index, holding 28 stocks in its basket with heavy concentration on the top six firms.
AMLP is the most popular and most liquid ETF in the MLP space, with&nbsp;$10.1 billion in assets under management and average daily volume of 15.9 million shares. It charges 85 bps in fees per year from investors.
SPDR S&amp;P Pharmaceuticals ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xph#NYSE">XPH</a>)
A wave of mergers and acquisitions and encouraging trends including faster drug approvals, new products and Trump&#39;s tax reform fueled growth in the pharma industry. XPH provides exposure to pharma companies by tracking the S&amp;P Pharmaceuticals Select Industry Index. The product holds 44 securities, with none making up for more than 5 percent&nbsp;share each.
With AUM of $351.4 million, it trades in good volume of around 74,000 shares a day and charges 35 bps in fees a year. The product was up 7.9 percent&nbsp;over the previous month.
Invesco S&amp;P 500 Equal Weight Industrials ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/rgi#NYSE">RGI</a>)
Though the sector has been hit hard by tariff and trade disputes, it regained momentum in July thanks to strong earnings and abating fears of a trade war. As such, RGI, which offers equal-weight exposure to the stocks in the industrials sector of the S&amp;P 500 Index, gained 7.3 percent in July.
The ETF follows the S&amp;P 500 Equal Weight Industrials Index, holding 70 stocks. Machinery and aerospace &amp; defense account for double-digit exposure each, while commercial services &amp; supplies, airlines and road &amp; rail round off the next spots with single-digit allocations. The product has accumulated $271.4 million in its asset base, while volume is light at around 22,000 shares. It charges 40 bps in annual fees.
SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xar#NYSE">XAR</a>)
Aerospace &amp; defense stocks ride higher on increased NATO defense spending, robust demand for passenger jets as well as earnings optimism. XAR offers equal-weight exposure to 35 stocks by tracking the S&amp;P Aerospace &amp; Defense Select Industry Index.
It has been able to manage $1.3 billion in its asset base, while trades in average daily volume of around 129,000 shares. It charges 35 bps in annual fees and has gained 7.9 percent&nbsp;in July.
Related Links:
<a href="https://www.benzinga.com/news/18/08/12120359/fidelity-rolls-out-zero-fee-index-funds">Fidelity Rolls Out Zero-Fee Index Funds</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/08/12123575/new-defiance-future-tech-etf-invests-in-virtual-augmented-re">New Defiance Future Tech ETF Invests In Virtual, Augmented Reality</a>

AMLP

JETS

Rydex ETF Trust Rydex S&P Equal Weight Industrials ETF

These 5 Sector ETFs Were Among The Best Performers In July

After recently joining the Dow Jones blue chip index, Walgreens Boots Alliance Inc&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/wba#NASDAQ">WBA</a>) began the day on a high note, reporting earnings per share of $1.35 and total revenue of $34.33 billion, above analyst expectations of $1.08 and $34.05 billion. Walgreens also announced a dividend hike and $10 billion in stock buybacks. Despite concerns about same store sales figures, Walgreens was trading 2.5% higher in premarket trading.
Then Amazon.com, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/amzn#NASDAQ">AMZN</a>) announced that it had agreed to buy a privately held online pharmacy called PillPack. Walgreens fell over 12 percent from its premarket high and other pharmacies such as CVS Health Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvs#NYSE">CVS</a>) and Rite Aid Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/rad#NYSE">RAD</a>) fell around 10 percent as well. This is not unprecedented after Amazon decides to enter a new market, known as &ldquo;Amazon effect&rdquo;. Even the SPDR S&amp;P Pharmaceuticals ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xph#NYSE">XPH</a>) was down 1 percent.
In analyzing the Walgreens weekly chart, we can see that it was trading in its rising phase, fairly early in the current market cycle. However, it has now broken below its cycle low, which is a bearish indicator for the price action remaining in this cycle. Further, the stock has been in poor technical condition, recently failing from resistance. In January, we added it to our &quot;Riskiest of 2018&quot; list. With so much time left in this cycle, our current target is $51 by mid-September.
Walgreens Boots Alliance Stock Chart with Weekly Bars 
<img src="https://lh6.googleusercontent.com/sUhOJRHeX-5tYxyh27T2FMnWu9jRGmUlWNtbuEj09laWnszpE0QhqLlneFLDQ5Ds5A3x9d0geGambG6HyWOpVpeVe3C3yb0IsOMJ99-U3SiUGCjr8pM4otG4dClec5WbeA0Y-KT3" style="-webkit-transform:rotate(0.00rad); border:none; height:352px; transform:rotate(0.00rad); width:624px" />
For more from Slim or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our <a href="https://www.youtube.com/channel/UCoAuxtwgh8LSHeMFqEwjgHA" style="text-decoration:none;">YouTube channel</a>. 
Related Links:
<a href="https://www.benzinga.com/news/18/06/11949184/amazon-to-buy-online-pharmacy-pillpack-drug-store-stocks-fall">Amazon To Buy Online Pharmacy PillPack; Drug Store Stocks Fall</a>
<a href="https://www.benzinga.com/news/18/06/11952693/mid-afternoon-market-update-dow-rises-over-100-points-progress-software-shares-s">Mid-Afternoon Market Update: Dow Rises Over 100 Points; Progress Software Shares Spike Higher</a>
Image credit: <a href="https://www.flickr.com/photos/jeepersmedia/15046322080/in/photolist-oVAkmd-ovSavU-oNmVVP-oNkdss-ovS82V-nVHMpN-ovS8KP-oViYTP-oN5YuK-ovSQWe-oEnb5c-paLcnj-oEnYKW-osqZC6-oEo9qg-ocV8WK-oWACTx-oWQoj5-obdwSb-oWSbDv-oWAEcp-oEoayt-ocV8bM-oqFkqG-o3eCmp-o5j7tP-oEo6Dz-oV2VfU-o3q1Nj-oNmT1a-JgKmhU-oUNbuZ-ovSPrk-oNkaCj-oUNbJ6-oNmTnc-oWSfBF-oN5VYn-24uxQ-oWQqB1-oNmSvH-oyfqtx-ovStsU-oNHhbE-ovSbjN-oWAH4B-ovS7nu-kfqKSR-oQHgiw-nL3oG7">Mike Mozart, Flickr</a>

AMZN

Amazon Breaks Walgreens' Bullish Cycle, More Downside To Come

Total earnings for <a href="https://www.zacks.com/ZER/zer_get_pdf.php?r=H0170834233&amp;ADID=ZP_Article_EarningsTrends">95.3%</a> of the total healthcare market capitalization are up 7.6% on revenue growth of 4.6%. Though earnings growth appears solid compared with many other sectors, earnings and revenue beat ratios of 72.5% and 58.8%, respectively, look disappointing.
	Among the most notable players, Johnson &amp; Johnson JNJ was the first major drug company to report earnings on Oct 17, followed by Eli Lilly and Company LLY and Bristol-Myers Squibb Company BMY on Oct 24 and Oct 26, respectively. Two other major U.S. drug companies, Merck MRK and Pfizer PFE, reported on Oct 27 and Oct 31, respectively. These industry primes posted solid results with either earnings or revenue beats or both.
	Johnson and Johnson Earnings in Focus
	The world&#39;s biggest maker of healthcare products continued its long streak of earnings beat. Earnings per share came in at $1.90, 10 cents ahead of the Zacks Consensus Estimate and 13.1% higher than the year-ago quarter. Revenues grew 10.3% year over year to $19.65 billion and edged past the Zacks Consensus Estimate of $19.28 billion. Johnson &amp; Johnson raised its full-year earnings per share guidance to $7.25-$7.30 from $7.12-$7.22 and revenue guidance to $76.1-$76.5 billion from $75.8-$76.1 billion (read: <a href="https://www.zacks.com/stock/news/279372/healthcare-etfs-in-focus-on-johnson-amp-johnson-q3-earnings">Healthcare ETFs in Focus on Johnson &amp; Johnson Q3 Earnings</a>).
	Pfizer Earnings in Focus
	The U.S. drug giant came up with an earnings beat and in-line revenues. Earnings per share of 67 cents came in a couple of cents above the Zacks Consensus Estimate while revenues of $13.7 billion were in line with the estimate of $13.17 billion. On a year-over-year basis, earnings per share and revenues rose 10% and 1%, respectively. For 2017, Pfizer narrowed the revenue guidance range to $52.4-$53.1 billion from $52-$54 billion while raised the earnings per share guidance range to $2.58-$2.62 from $2.54-$2.60.
	Merck Earnings in Focus
	Merck beat the earnings estimate while missed on revenues. Earnings per share came in at $1.11, surpassing the Zacks Consensus Estimate of $1.03 and improving 3.7% from the year-ago quarter. Revenues declined 2% year over year to $10.33 billion and were below the Zacks Consensus Estimate of $10.51 billion. Merck raised its revenue guidance to $40-$40.5 billion from $39.4-$40.4 billion and earnings per share guidance to $3.91-$3.97 from $3.76-$3.88 for this year.
	Bristol-Myers Earnings in Focus
	Bristol-Myers missed on earnings while beats on revenues. It reported earnings per share of 75 cents, a couple of cents below the estimate. Revenues grew 7.1% to $5.25 billion and edged past the Zacks Consensus Estimate of $5.19 billion. The company raised its earnings per share guidance to $2.95-$3.05 from $2.90-$3.00 (see: <a href="https://www.zacks.com/funds/etfs/etf-categories/Health-Care-ETFs-13">all the Healthcare ETFs here</a>).
	Eli Lilly Earnings in Focus
	Eli Lilly topped the Zacks Consensus Estimate on both fronts. Earnings of $1.05 outpaced the Zacks Consensus Estimate by couple of cents and came in 19% higher than the year-ago quarter. Revenues grew 9% to $5.66 billion and beat the $5.52-billion estimate. Like other drug makers, Eli Lilly also raised its 2017 revenue and earnings guidance. It now expects revenues in the range of $22.4-$22.7 billion compared with the previous expectation of $22.0-$22.5 billion and earnings per share in the range of $4.15-$4.25 versus $4.10-$4.20 expected previously.
	ETF Angle
	The string of earnings beat failed to boost pharma ETFs as they saw rough trading over the past one month. Below, we have highlighted these in detail. These funds have a Zacks ETF Rank #3 (Hold) with a High risk outlook:
	PowerShares Dynamic Pharmaceuticals Fund PJP
	This is by far the most popular choice in the pharma space that follows the Dynamic Pharmaceuticals Intellidex Index. The product has AUM of about $663.7 million and sees a lower volume of around 52,000 shares a day. The fund charges 56 bps in fees and expenses. Holding 30 stocks, the fund invests around 22.8% share in the in-focus five firms. The ETF has lost 6% in a month.
	iShares U.S. Pharmaceuticals ETF IHE
	This ETF provides exposure to 42 pharma stocks by tracking the Dow Jones U.S. Select Pharmaceuticals Index. The in-focus firms are the top five holdings in the basket accounting for a combined 40.3% of total assets, suggesting heavy concentration. The product has $594.5 million in AUM and charges 44 bps in fees and expense. Volume is light as it exchanges about 19,000 shares a day. The fund has shed 6% in a month (read: <a href="https://www.zacks.com/stock/news/282089/what-lies-in-store-for-pharma-etfs">What Lies in Store for Pharma ETFs?</a>).
	SPDR S&amp;P Pharmaceuticals ETF XPH
	This fund provides exposure to the pharma companies by tracking the S&amp;P Pharmaceuticals Select Industry Index. With AUM of $396.6 million, it trades in a good volume of around 90,000 shares a day and charges 35 bps in fees a year. In total, the product holds 39 securities with the in-focus five firms taking nearly 5% share each. The product was down 7% in the same period.
	VanEck Vectors Pharmaceutical ETF PPH
	This ETF follows the MVIS US Listed Pharmaceutical 25 Index and holds 26 stocks in its basket. Johnson &amp; Johnson, Pfizer, Bristol-Myers, and Eli Lilly accounts for at least 5% share each while Merck makes up for 4.4% of assets. The product has amassed $262.4 million in its asset base and trades in a moderate volume of about 67,000 shares a day. Expense ratio comes in at 0.35%. The fund has lost 5.9% in a month. 
	&nbsp;<img alt="" src="https://staticx-tuner.zacks.com/images/zadmin_tuner_image/pharma etf.jpg" style="width: 620px; height: 252px;" />
	Want key ETF info delivered straight to your inbox? 
	Zacks&#39; free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. <a href="https://www.zacks.com/registration/newsletter/?type=FND&amp;ADID=Zcom_commentary_fundnewsletter_moneysense_ECD_ETF">Get it free &gt;&gt;</a>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. <a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-282412" target="_blank">Click to get this free report</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=BMY&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-282412">Bristol-Myers Squibb Company (NYSE: </a><a class="ticker" href="/stock/bmy#NYSE">BMY</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=PFE&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-282412">Pfizer, Inc. (NYSE: </a><a class="ticker" href="/stock/pfe#NYSE">PFE</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=LLY&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-282412">Eli Lilly and Company (NYSE: </a><a class="ticker" href="/stock/lly#NYSE">LLY</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=JNJ&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-282412">Johnson &amp; Johnson (NYSE: </a><a class="ticker" href="/stock/jnj#NYSE">JNJ</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=MRK&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-282412">Merck &amp; Company, Inc. (NYSE: </a><a class="ticker" href="/stock/mrk#NYSE">MRK</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=PJP&amp;split=1&amp;cid=CS-BENZ-FT-282412">PWRSH-DYN PHARM (ETF:PJP): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=XPH&amp;split=1&amp;cid=CS-BENZ-FT-282412">SPDR-SP PHARMA (ETF:XPH): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=PPH&amp;split=1&amp;cid=CS-BENZ-FT-282412">VANECK-PHARMA (ETF:PPH): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=IHE&amp;split=1&amp;cid=CS-BENZ-FT-282412">ISHARS-US PHARM (ETF:IHE): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/stock/news/282412/pharma-etfs-down-post-q3-earnings?cid=CS-BENZ-FT-282412">To read this article on Zacks.com click here.</a> 
	&nbsp; 
	<a href="http://www.zacks.com/">Zacks Investment Research</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=ZACKS_PFP_7BEST_ETF">Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report</a>

Pharma ETFs Down Post Q3 Earnings

We are halfway through 2017 and pharma stocks have recovered nicely with their performance representing a sharp contrast to 2016 when the sector was under immense pressure due to the drug pricing issue. Another factor that weighed on pharma stocks last year was the noticeably lower number of FDA approvals. 2016 saw only 22 treatments gaining FDA approval, well below 45 approvals in 2015 and 41 in 2014. The industry was also hit by some high profile R&amp;D failures as well as mixed results, slower-than-expected new product launches and increasing competition.
&nbsp;
However, the sector has fared better this yearand the NYSE ARCA Pharmaceutical Index is up 10.1% year-to-date (YTD). New product sales ramp up, R&amp;D success and innovation, strong results, a higher number of FDA approvals and continued strong performance from legacy products are some of the factors that could contribute to a sustained recovery in the sector. Tax reforms and cash repatriation would support a recovery as well. (Read: <a href="https://www.zacks.com/stock/news/266090/forget-big-tech-biotech-etfs-are-soaring-higher">Forget Big Tech; Biotech ETFs are Soaring Higher</a>)
&nbsp;
Importantly, investors now seem to be more comfortable with the drug pricing scenario and are willing to look at the fundamentals of the sector. Although the drug pricing issue will remain a headwind this year as well, expectations are that steps taken by the Trump administration to drive down drug prices will not be as draconian as previously expected.&nbsp;
&nbsp;
Deregulation and increased competition seem to be some of the ways that will be used to control drug prices. FDA Commissioner Scott Gottlieb recently said that the agency is working on a plan to lower healthcare costs by speeding up the development of next-generation treatments, especially for rare diseases or targeted cancer therapies.
&nbsp;
Faster Drug Approval Process?
&nbsp;
At a meeting with pharma majors earlier this year, President Trump spoke about speeding up the FDA approval process. The President said that the FDA will be streamlined and the drug approval process will be much faster. The 21st Century Cures Act is a step in this direction.
&nbsp;
With the passing of this Act, expectations are that there will be more innovation in the sector and, maybe, a surge in new drug approvals. According to an IMSQuintiles report, the late-phase R&amp;D pipeline for the industry indicates that there should be about 40-45 new brand launches every year through 2021.
&nbsp;
Meanwhile, the FDA has already surpassed last year&#39;s total tally with 23 drugs being approved so far in 2017. &nbsp;(Read: <a href="https://www.zacks.com/stock/news/266846/how-to-build-a-winning-etf-portfolio-for-secondhalf-2017">How to Build a Winning ETF Portfolio for Second-Half 2017</a>)
&nbsp;
Will M&amp;As Pick Pace?
&nbsp;
There has been a lot of consolidation in the pharma industry over the last few years with quite a few deals being announced/completed in 2016. Expectations are high that M&amp;As will increase as the year progresses -- potential tax reform and cash repatriation are expected to lead to a boost in this area. While not too many deals have been announced so far in 2017, we could see several M&amp;A agreements being announced in the coming quarters though companies are wary of bidding wars leading to over-priced deals.
&nbsp;
Companies with innovative technologies and pipelines are highly sought after. Niche disease areas like nonalcoholic steatohepatitis (NASH), immuno-oncology and multiple sclerosis are in demand. Treatments for orphan diseases are also much sought after with quite a few deals being signed in these areas. (Read: <a href="https://www.zacks.com/stock/news/266243/best-leveraged-etfs-of-first-half-of-2017">Best Leveraged ETFs of First Half of 2017</a>)
&nbsp;
Innovative Pipelines &amp; Catalyst Rich 2017 
&nbsp;
Pharma companies continue to work on bringing innovative new treatments to market, and there could be significant catalysts in the coming quarters in the form of important new product approvals as well as major data read-outs especially in key therapeutic areas like immuno-oncology, Alzheimer&#39;s, central nervous system disorders, and immunology/inflammation.
&nbsp;
Cancer remains a key focus area. According to IMSQuintiles, 68 new cancer drugs were approved for 22 indications from 2011 to 2016 while worldwide costs for cancer therapeutics and supportive care drugs shot up from $91 billion in 2012 to $113 billion in 2016. More than 600 molecules are in late stage development with the majority being targeted therapy.
&nbsp;
Meanwhile, sales of products that gained approval over the last two years as well as line extensions should ramp up and boost growth.
&nbsp;
Pharma ETFs in Focus
&nbsp;
Highlighted below are some pharma ETFs - ETFs present a low-cost and convenient way to get a diversified exposure to the sector.
&nbsp;
Powershares Dynamic Pharmaceuticals ETF (ETF:PJP)
&nbsp;
PJP, launched in Jun 2005 by Invesco PowerShares, tracks the Dynamic Pharmaceuticals Intellidex Index. The fund covers healthcare stocks. The top 3 holdings include Celgene Corporation (5.24%), Amgen Inc. (5.14%) and AbbVie Inc. (5.01%). The total assets of the fund as of Jul 6, 2017 were $742.1 million representing 30 holdings. The fund&#39;s expense ratio is 0.57% while dividend yield is 0.81%. The trading volume is roughly 53,041 shares per day.
&nbsp;
SPDR S&amp;P Pharmaceuticals ETF (ETF:XPH)
&nbsp;
XPH, launched inJun 2006, tracks the S&amp;P Pharmaceuticals Select Industry Index. This ETF primarily covers pharma stocks with the top 3 holdings being Akorn, Inc. (5.27%), Jazz Pharmaceuticals plc (5.19%), and Endo International, plc (4.7%).
&nbsp;
Total assets as of Jul 6, 2017 were $458.5 million representing 38 holdings. The fund&#39;s expense ratio is 0.35% and dividend yield is 0.62%.The trading volume is roughly 58,019 shares per day.
&nbsp;
iShares U.S. Pharmaceuticals (ETF:IHE)
&nbsp;
IHE, launched in May 2006, seeks investment results that correspond generally to the price and yield performance of the Dow Jones U.S. Select Pharmaceuticals Index. The fund mainly consists of pharma companies (89.8%). Biotech companies account for about 10.1% of the fund.
&nbsp;
The top 3 holdings of this fund are Johnson &amp; Johnson (9.95%), Pfizer Inc. (8.21%) and Merck &amp; Co. Inc. (7.58%). The total assets of the fund as of Jul 6, 2017 were $693.7 million representing 41 holdings. The fund&#39;s expense ratio is 0.44% with the dividend yield being 1.25%. The trading volume is roughly 19,527 shares per day.
&nbsp;
Market Vectors Pharmaceutical (ETF:PPH)
&nbsp;
PPH was launched in Dec 2011 and tracks the Market Vectors U.S. Listed Pharmaceutical 25 Index. This ETF covers healthcare stocks. While the expense ratio is 0.35%, dividend yield is 1.95%. The trading volume is roughly 39,357 shares per day. The total assets of the fund as of Jul 6, 2017 were $276.8 million representing 26 holdings. The top 3 holdings of this fund are Johnson &amp; Johnson (8.63%), Novartis AG (6.4%) and AbbVie Inc. (5.17%).
&nbsp;
Conclusion
&nbsp;
Although fears regarding the drug pricing issue have waned, it will nevertheless remain a headwind until the Trump administration comes out with a policy for controlling drug prices. Meanwhile, increased pipeline visibility and appropriate utilization of cash should increase confidence in the sector.
&nbsp;
Want key ETF info delivered straight to your inbox?
	Zacks&#39; free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.&nbsp;<a href="https://www.zacks.com/registration/newsletter/?type=FND&amp;ADID=Zcom_commentary_fundnewsletter_moneysense_ECD_ETF">Get it free &gt;&gt;</a>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. <a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-267023" target="_blank">Click to get this free report</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=PJP&amp;split=1&amp;cid=CS-BENZ-FT-267023">PWRSH-DYN PHARM (ETF:PJP): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=XPH&amp;split=1&amp;cid=CS-BENZ-FT-267023">SPDR-SP PHARMA (ETF:XPH): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=PPH&amp;split=1&amp;cid=CS-BENZ-FT-267023">VANECK-PHARMA (ETF:PPH): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=IHE&amp;split=1&amp;cid=CS-BENZ-FT-267023">ISHARS-US PHARM (ETF:IHE): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/stock/news/267023/what-lies-ahead-for-pharma-etfs-in-second-half-2017?cid=CS-BENZ-FT-267023">To read this article on Zacks.com click here.</a> 
	&nbsp; 
	<a href="http://www.zacks.com/">Zacks Investment Research</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=ZACKS_PFP_7BEST_ETF">Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report</a>

What Lies Ahead For Pharma ETFs In Second Half 2017

Biotech stocks are seeking to regain some semblance of normalcy after Wednesday&#39;s Trump-inspired selloff. Much against market perceptions of a biotech-friendly President-elect Donald Trump stance, he hit out at the sector, with a <a href="http://www.benzinga.com/general/biotech/16/12/8780563/trump-im-going-to-bring-down-drug-prices"> vague message</a> that suggested he is going to clamp down on drug prices.

	Biotech investors hardly expected such as statement from a person they believed to be sector-friendly, given his earlier neutral stance as opposed to <a href="http://money.cnn.com/2015/09/21/investing/hillary-clinton-biotech-price-gouging/"> Hillary Clinton,</a> who had made the fight against price gouging as a major election theme. So, it took them by surprise and a selloff promptly followed on Wednesday. The weakness was so stark that it made <a href="https://twitter.com/SullyCNBC/status/806575488730857476"> CNBC&#39;s Brian Sullivan tweet </a> that biotechs/healthcare was the only sector to have been left out of what seemed to be a market-wide rally on Wednesday.

	<a href="https://twitter.com/SullyCNBC/status/806575488730857476"><img alt="biotech.png" src="/files/images/2016/December/08/biotech.png" style="width: 500px; height: 211px;" /></a>
<h3>
	Putting Things In Perspective</h3>

	iShares NASDAQ Biotechnology Index (ETF) (NASDAQ: <a class="ticker" href="/stock/ibb#NASDAQ">IBB</a>) gained 12 percent from its pre-election level to 291.33 on November 14 but has been giving back ground since then. On Wednesday, the ETF fell 2.94 percent despite the Dow Jones Industrial Average (INDEXDJX:.DJI) and the S&amp;P 500 (INDEXSP:.INX) hitting new closing highs.

	The NYSE ARCA BIOTECH INDEX (INDEXNYSEGIS:BTK), which had a 5.4 per gain thus far and a peak gain percentage of roughly 14 percent post the elections, lost a steeper 3.01 percent.

	The SPDR S&amp;P Pharmaceuticals (ETF) (NYSE: <a class="ticker" href="/stock/xph#NYSE">XPH</a>) was off 2 percent at 38.54 Wednesday following a pre-election peak of 42.05 on November 14.
<h3>
	Weird Wednesday For Biotech Stocks</h3>
<ul>
<li>
		Celgene Corporation (NASDAQ: <a class="ticker" href="/stock/celg#NASDAQ">CELG</a>) lost 4.03 percent before ending down 4.03 percent.</li>
<li>
		Illumina, Inc. (NASDAQ: <a class="ticker" href="/stock/ilmn#NASDAQ">ILMN</a>) ended down 3.5 percent at $122.02.</li>
<li>
		Incyte Corporation (NASDAQ: <a class="ticker" href="/stock/incy#NASDAQ">INCY</a>) ended down 4.90 percent at $101.96.</li>
<li>
		Mylan NV (NASDAQ: <a class="ticker" href="/stock/myl#NASDAQ">MYL</a>) slipped 3.79 percent to $34.50.</li>
<li>
		Regeneron Pharmaceuticals Inc (NASDAQ: <a class="ticker" href="/stock/regn#NASDAQ">REGN</a>) lost 1.88 percent to $362.01.</li>
<li>
		Vertex Pharmaceuticals Incorporated (NASDAQ: <a class="ticker" href="/stock/vrtx#NASDAQ">VRTX</a>) was down 3.58 percent at $75.32 at the close.</li>
</ul>
<h3>
	At Last Check</h3>
<ul>
<li>
		Celgene was down 0.28 percent at $112.34.</li>
<li>
		IBB was down 0.86 percent at $263.98.</li>
<li>
		Illumina was down 0.44 percent at $121.48.</li>
<li>
		Mylan was down 0.32 percent at $34.61.</li>
<li>
		Regeneron was up 0.7 percent at $364.55.</li>
<li>
		SPDR S&amp;P Biotech (ETF) (NYSE: <a class="ticker" href="/stock/xbi#NYSE">XBI</a>) was down 1.33 percent at $60.97.</li>
<li>
		Vertex Pharma was down 0.29 percent at $74.10.</li>
<li>XPH was down 2.05 percent at $37.75.</li>
</ul>

	Image Credit: By Gage Skidmore from Peoria, AZ, United States of America (Donald Trump) [CC BY-SA 2.0], via <a href="https://commons.wikimedia.org/wiki/File:Donald_Trump_(23717360451).jpg">Wikimedia Commons</a>

Politics

Movers

CELG

ILMN

INCY

REGN

VRTX

Biotech Stocks Convalescing After Wednesday's Trump-Inspired Biotech Selloff

Pharmaceutical investors could breathe a sigh of relief after <a href="http://www.benzinga.com/topic/donald-trump">Donald Trump</a> won the race to the White House, at least according to <a href="http://www.benzinga.com/topic/alex-arfaei">Alex Arfaei</a> of BMO Capital Markets.
Arfaei commented in a research report on Wednesday that a Trump presidency, coupled with a Republican Congress and the apparent defeat of <a href="http://www.cnbc.com/2016/11/07/californias-very-expensive-drug-price-battle-prop-61-fight-gets-even-nastier.html">Proposition 61 in California</a> are all factors that support the pharmaceutical industry.
Arfaei continued that the pharmaceutical space will be characterized by the following:
<ol>
<li>Lower drug pricing pressures.</li>
<li>The potential repeal of the Affordable Care Act ("Obamacare") with more industry friendly reforms.</li>
<li>Increased probability of lower corporate tax rates.</li>
<li>Profit repatriation.</li>
</ol>
<h3>Drug Pricing Pressures</h3>
Hillary Clinton campaigned on targeting drug prices, but her defeat in the election now makes her proposals much less likely.
<h3>Obamacare</h3>
Trump campaigned to repeal Obamacare and replace it with reforms that follow free market principles.
While the Republicans may or may not be successful in actually repealing Obamacare &mdash; and it is uncertain what it would be replaced with &mdash; chances are likely it will be replaced with reforms that are friendly to the pharmaceutical industry.
<h3>Corporate Tax Rates</h3>
The analyst views Trump&#39;s plans to lower corporate tax rates from 35 percent to 15 percent as being favorable for the pharmaceutical industry. In addition, Trump&#39;s proposals of allowing companies to repatriate foreign cash at a one-time 10 percent tax rate will result in increased capital returns to shareholders through dividends and share buybacks.
<h3>Top Pick</h3>
Arfaei concluded that the U.S. election should be viewed as positive for the entire pharmaceutical universe, particularly for Pfizer Inc. (NYSE: <a class="ticker" href="/stock/pfe#NYSE">PFE</a>).
<h3>At Last Check ...</h3>
<ul>
<li>iShares Dow Jones US Pharm Indx (ETF) (NYSE: <a class="ticker" href="/stock/ihe#NYSE">IHE</a>) was up 5.5 percent at $143.29.</li>
<li>iShares NASDAQ Biotechnology Index (ETF) (NASDAQ: <a class="ticker" href="/stock/ibb#NASDAQ">IBB</a>) is up 7.47 percent at $281.16.</li>
<li>Pfizer was up 6.33 percent at $31.90.</li>
<li>SPDR S&amp;P Biotech (ETF) (NYSE: <a class="ticker" href="/stock/xbi#NYSE">XBI</a>) was up 8.31 percent at $62.59.</li>
<li>SPDR S&amp;P Pharmaceuticals (ETF) (NYSE: <a class="ticker" href="/stock/xph#NYSE">XPH</a>) was up 5.31 percent at $40.23.</li>
</ul>

Analyst Color

Last Night's Election - A Series Of Fortunate Events For Big Pharma

The strongest catalysts for a pharma stock are the various milestones on the road to FDA approval for new drugs. For new investors, they&rsquo;ll often see a stock rise astronomically, but, when they go to make sense of the reasons for the jump, they&rsquo;re greeted with unfamiliar acronyms.
Let&rsquo;s try to make some sense of them and the process a new drug goes through before approval.
<h3>Phase Trials</h3>
One news item that regularly affects the price of a stock is the different phase studies, of which there are three, aptly called Phase 1, Phase 2 and Phase 3.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/general/biotech/16/09/8500542/drug-price-bubble-a-result-of-decade-long-economic-policy-issues">Drug Price Bubble A Result Of Decade-Long Economic Policy Issues</a></bzrelatedlink>
<ul>
<li>Phase 1 is to determine the safety and dosage of a new drug. It typically takes several months. About 70 percent of drugs move past this Phase and onto the next, according to the FDA.</li>
<li>Phase 2 is to determine the efficacy and side effects of a new drug. This can take several months to two years. According to the FDA, about a third of drugs studied are able to make it past Phase 2 studies.</li>
<li>Phase 3 studies can take one to four years and are designed to determine the efficacy of the drug as well as monitoring the adverse reactions to the drug. According to the FDA, between 25 and 30 percent of new drugs are able to make it past Phase 3.</li>
</ul>
The milestones a drug hits as it passes through these three discrete phases often act as catalysts for the price of the company&rsquo;s stock, as well as the next step.
<h3>New Drug Application (NDA)</h3>
The company has enough information on its new drug to complete and submit a New Drug Application (NDA). Since 1938, every drug in United States hospitals and pharmacies has had a New Drug Application (NDA) submitted and approved.
According to the FDA, each NDA must show three things:
<ul>
<ol>
<li>The drug is &ldquo;safe and effective in its proposed uses,&rdquo; with the benefits outweighing the risks.</li>
<li>The labeling is appropriate and contains all necessary warnings, side effects and ingredients.</li>
<li>The manufacturing process and the &ldquo;controls used to maintain the drug&rsquo;s quality&rdquo; (i.e., capsules, packaging) are able to effectively preserve the drug&rsquo;s &ldquo;identity, strength and purity.&rdquo;</li>
</ol>
</ul>
&ldquo;The documentation required in an NDA is supposed to tell the drug&#39;s whole story,&rdquo; according to the FDA website, &ldquo;including what happened during the clinical tests, what the ingredients of the drug are, the results of the animal studies, how the drug behaves in the body, and how it is manufactured, processed and packaged.&rdquo;
<h3>PDUFA Panel</h3>
The Prescription Drug User Fee Act (PDUFA) was originally passed in 1992 with the purpose of providing greater funding for reviewers so that more applications could be reviewed. The acronym is most often heard in reference to PDUFA dates or the amount of time the FDA has to review an application and either approve or deny it &mdash; typically ten months.
Sometimes, the FDA will give a drug a priority designation, which brings the PDUFA date from ten months to six, essentially fast-tracking the process and shortening the amount of time before a drug can hit the market.
<a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a>
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email <a href="mailto:feedback@benzinga.com">feedback@benzinga.com</a> with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Education

GNRX

Getting Into The Drug Business: From NDAs To PDUFA Dates

Activists in Ohio and California are calling for all citizens to get Veterans Administration (VA) prices on prescription drugs. With California set to vote on the issue in November, Morgan Stanley analyst David Risinger set out to answer a pair of key questions about the issue.

	First, Risinger wanted to determine how much of a discount the VA gets compared to Medicaid. The most recent data that Morgan Stanley could track down was from a 2005 study that revealed that Medicaid&rsquo;s net drug price was roughly 51 percent of manufacturer list price, whereas VA average price was about 42 percent of list price.

	Second, Risinger wanted to determin what percentage of the overall U.S. drug spend comes from Medicaid. According to CMS&rsquo;s 2014 National Health Expenditures report, Medicaid represents about 11 percent of total U.S. drug spend.
<h3>
	What does it all mean?</h3>

	&ldquo;If all states instituted VA pricing for drugs, we estimate it would only result in a 2% decline in US drug spend, or approximately $6B,&rdquo; Risinger explains.

	The real risk to these state pricing initiatives could be to the multiples of big pharma stocks if the market overestimates the impact VA pricing would have on their bottom lines.

	So far this year, fears over drug pricing regulations have driven down the SPDR S&amp;P Pharmaceuticals (ETF) (NYSE: <a class="ticker" href="/stock/xph#NYSE">XPH</a>) by 13.9 percent.

	Disclosure: the author holds no position in the stocks mentioned.

Morgan Stanley: How Much Would Pharma Companies Lose If The Whole Country Got VA Drug Prices?

Investors were reminded Monday that the healthcare sector remains this year&rsquo;s premiere destination for large-scale mergers and acquisitions activity when Israel&rsquo;s Teva Pharmaceuticals (NYSE: <a class="ticker" href="/stock/teva#NYSE">TEVA</a>) agreed to pay $40.5 billion in cash and stock for Allergan PLC&nbsp;(NYSE: <a class="ticker" href="/stock/agn#NYSE">AGN</a>)&#39;s generic drugs unit.

	That does not represent the end of pharmaceuticals M&amp;A activity. It probably doesn&rsquo;t and there are several exchange traded funds that should benefit from more consolidation in the pharmaceuticals industry.

	The $409 million Market Vectors Pharmaceutical ETF (NYSE: <a class="ticker" href="/stock/pph#NYSE">PPH</a>) is a good place to look for potential pharma buyers and sellers. Home to 26 stocks, PPH features plenty of buyers and potential buyers, including a 5.4 percent weight to Teva and an almost 5.5 percent weight to Dow component Pfizer Inc.&nbsp;(NYSE: <a class="ticker" href="/stock/pfe#NYSE">PFE</a>), a company that has been champing at the bit to execute a big deal.

	What makes PPH more compelling as a pharma M&amp;A play <a href="http://blogs.barrons.com/stockstowatchtoday/2015/07/28/wait-will-allergan-really-buy-biogen-or-amgen/?mod=BOL_hp_blog_stw">are comments from </a>Allergan CEO Brent Saunders indicating his company could set its sites on bigger names such as AbbVie (NYSE: <a class="ticker" href="/stock/abbv#NYSE">ABBV</a>) or Biogen Inc&nbsp;(NASDAQ: <a class="ticker" href="/stock/biib#NASDAQ">BIIB</a>). That is just talk, but PPH allocates 5 percent of its weight to AbbVie.&nbsp;

	Additionally, PPH also features a combined weight of nearly 5 percent to Mylan NV&nbsp;(NASDAQ: <a class="ticker" href="/stock/myl#NASDAQ">MYL</a>), which has tanked in the wake of Teva&rsquo;s buy of Allergan&rsquo;s generics unit, and Perrigo (NYSE: <a class="ticker" href="/stock/prgo#NYSE">PRGO</a>). Mylan is trying to acquire Perrigo, but has been rebuffed twice, potentially forcing the former to make a more compelling offer or look for new targets.

	Other PPH holdings that have previously been rumored to be potential targets include Jazz Pharmaceuticals (NASDAQ: <a class="ticker" href="/stock/jazz#NASDAQ">JAZZ</a>) and Mallinckrodt PLC (NYSE: <a class="ticker" href="/stock/mnk#NYSE">MNK</a>).

	In a <a href="http://finance.yahoo.com/news/analysts-expect-more-tie-ups-185522396.html">media report out </a>on Monday, RBC Capital Markets identified Akorn, Inc.&nbsp;(NASDAQ: <a class="ticker" href="/stock/akrx#NASDAQ">AKRX</a>), Sagent Pharmaceuticals (NASDAQ: <a class="ticker" href="/stock/sgnt#NASDAQ">SGNT</a>) and Impax Laboratories (NASDAQ: <a class="ticker" href="/stock/ipxl#NASDAQ">IPXL</a>) as companies that will have a chance to grow as larger specialty pharma firms combine or are snatched up by bigger rivals.

	Those stocks combine for 7.2 percent of the SPDR S&amp;P Pharmaceuticals (ETF) (NYSE: <a class="ticker" href="/stock/xph#NYSE">XPH</a>). As an equal-weight ETF, XPH is not excessively exposed to any of its 40 holdings. That mutes the impact one deal can have on the ETF.

	However, XPH does not lack for potential buyers and sellers in pharma M&amp;A. At least five XPH holdings have been mentioned as credible takeover targets, while at least a quarter of the ETF&rsquo;s constituents, names such as Allergan, Abbvie and Johnson &amp; Johnson (NYSE: <a class="ticker" href="/stock/jnj#NYSE">JNJ</a>), have the ability to get big deals done.

	XPH is up 34 percent over the past year, while PPH is higher by about 20 percent over the same period.

AKRX

IPXL

JAZZ

PRGO

SGNT

TEVA

ETFs For The Next Pharma Takeover Candidates

This week, Akorn, Inc. (NASDAQ:<a href="http://www.benzinga.com/stock/akrx">AKRX</a>) offers a great buying opportunity for a short-term swing trade.

	As a stock, Akorn has a bevy of favorable characteristics that make this set up a swing-trader&#39;s dream. The stock is situated in the Pharmaceuticals sub-industry, dabbling in Biotechnology as well. Currently, Biotechnology (XBI) and Pharmaceuticals (XPH) are both on a nice bull run, while Akorn is outperforming both greater sub-industries.

	AKRX features an up-trending pattern in the long term, intermediate term and short term. Basically, no matter how you slice it, the stock has been extremely solid over the past few years. While there have been brief consolidation periods to begin 2013 and 2014, the stock has otherwise been on a sterling up-trend with explosive returns.
<h3>
	Turning To This Year</h3>

	After basing in April, Akorn has been on a tear from the $22 area up to prices north of $39 to begin in September (up 77 percent in six months). The stock has not developed a dangerous parabolic pattern despite its heavy gains, and continues to display short consolidation and pull-backs that have been great buying opportunities recently.

	Akorn has remained above its 50-day moving average since the April base, which is also a very bullish sign. After hitting opening highs of $39.25 on September 3rd, Akorn has pulled back to the 50-day moving average, where it seems to be basing. With some short-term support just below in the $35.30 area, it appears the pull-back is about done.

	Akorn does not report earnings until early November and is relatively quiet among headlines recently, so it appears there are few deterrents, news-wise at least, that would keep the stock from continuing its impressive march higher.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/top-stories/14/09/4835233/the-vix-is-cheap-is-it-time-to-buy">The VIX Is Cheap &ndash; Is It Time To Buy?</a></bzrelatedlink>

	The current pull-back is a chance to catch Akorn at a decent entry price for a short-term swing trade. A run back to $39.25 from current prices would produce a gain of +8.63 percent, making the upside here considerable given the time-frame (one- to two-week hold). The potential downside with a stop at support ($35.34) would be just -2.24 percent, which gives this set up a very high reward-to-risk ratio.

	<img src="https://www.benzinga.com/files/u63186/akrx.png" />

	Disclosure: At the time of publication the editor and affiliated companies own the following positions: None

Is Akorn, Inc. An Easy Buy This Week?

Like Big Oil, Big Pharma has entered a period of consolidation.

	There are many factors contributing to this. First, it can be cheaper to buy a company with a promising product rather than undergo the costs of developing a drug.
 Add in low interest rates that make it cheap to borrow money to buy other companies. Finally, Big Pharma has also done well, providing the profit income that allows for corporate deals.
 For investors, there are three ways to profit from these drug company deals.

	1. Exchange traded funds for the sector offer profits from a broad asset base.

	As discussed in a recent <a href="http://www.benzinga.com/etfs/sector-etfs/14/04/4487079/drug-etfs-surge-on-m-a-activity-agn-vrx-ihe-xph-pph-azn">article on Benzinga</a>, ETFs covering the sector include iShares US Pharmaceutical (NYSE: <a class="ticker" href="/stock/ihe#NYSE">IHE</a>), SPDR S&amp;P US Pharmaceuticals (NYSE: <a class="ticker" href="/stock/xph#NYSE">XPH</a>), and Market Vectors Pharmaceutical ETF (NYSE: <a class="ticker" href="/stock/pph#NYSE">PPH</a>). All have done well in recent market action to the appeal of drug companies.
 If consolidation continues, which is should, the <a href="http://www.benzinga.com/topic/etfs">ETFs</a> could do even better. Market Vectors Pharmaceuticals ETF is the only one that holds foreign firms.

 See also: <a href="http://www.benzinga.com/trading-ideas/long-ideas/14/04/4473539/natural-resource-stocks-for-income-value-and-growth-investors">Natural Resource Stocks For Income, Value and Growth Investors</a>
	2. It is always wise to own blue chip Big Pharma.

	Companies such as Merck (NYSE: <a class="ticker" href="/stock/mrk#NYSE">MRK</a>) and Pfizer (NYSE: <a class="ticker" href="/stock/pfe#NYSE">PFE</a>) are great stocks. Both have done well in the bull market.
 The merger activity in the sector will the share prices of all of the publicly traded companies. In addition, <a href="http://www.benzinga.com/topic/merck">Merck</a> and <a href="http://www.benzinga.com/topic/pfizer">Pfizer</a> have high dividend yields, too.

	3. Big Pharma loves buying appealing small caps like CytoDyn, Inc. (NASDAQ: <a class="ticker" href="/stock/cydy#NASDAQ">CYDY</a>).
Owning a target company in a period of consolidation can be profitable. As covered in another <a href="http://www.benzinga.com/trading-ideas/long-ideas/14/04/4418708/helping-patients-more-with-less-drugs-an-interview-with-cytod">article on Benzinga</a>, CytoDyn is a small cap biotech firm with a product developing well that could revolutionize the treatment of HIV patients. 
That is a huge market with tremendous cost savings from the "drug holiday" treatment that CytoDyn hopes to bring to market. This is type product that, if approved, makes the host company very tempting.

	The drug industry should continue to do well. Populations in major countries are aging, which increases spending for pharmaceutical products. Emerging market countries will also spend more on drugs and related services as health care improves from greater affluence.  From that, the ETFs, blue chips, and small caps in the drug industry should continue to do well!

Dividends

Emerging Markets

Small Cap Analysis

CYDY

3 Ways To Profit From Merger Activity In The Pharmaceutical Sector

Over the past couple of days there has been news of several multi-billion dollar deals in the pharmaceutical sector.

	The big news came on Monday night when it began to leak that Valeant Pharmaceuticals (NYSE: <a class="ticker" href="/stock/vrx#NYSE">VRX</a>) was going to make a bid for Allergan (NYSE: <a class="ticker" href="/stock/agn#NYSE">AGN</a>), the maker of <a href="http://www.benzinga.com/topic/botox">Botox</a>.

	The deal could be worth as much as $47 billion in cash and stock. The share price of both stocks soared on the news.

	This weekend there was a rumor that Pfizer (NYSE: <a class="ticker" href="/stock/pfe#NYSE">PFE</a>) could make a bid for AstraZeneca (NYSE: <a class="ticker" href="/stock/azn#NYSE">AZN</a>) that would make it one of the largest deals in the sector, upwards of $100 billion.

	And then there was Novartis (NYSE: <a class="ticker" href="/stock/nvs#NYSE">NVS</a>) buying the oncology unit at GlaxoSmithKline (NYSE: <a class="ticker" href="/stock/gsk#NYSE">GSK</a>) for over $15 billion.

	See also: <a href="http://www.benzinga.com/news/14/04/4487719/comparing-beyond-bric-etfs-embb-bbrc-emfm-eem">Comparing Beyond BRIC ETFs</a>

	The flurry of <a href="http://www.benzinga.com/news/m-a">M&amp;A activity</a> has helped the sector rebound from a nasty sell-off that was led by the <a href="http://www.benzinga.com/topic/biotech">biotech </a>stocks over the last month. The moves over the last few days show the strength of the sector and the cash that is available for even more mergers in the future.

	Pharma ETFs

	When there is M&amp;A activity in a sector it typically creates excitement and it attracts new money. This trend will help all pharma-related ETFs. The iShares U.S. Pharmaceutical ETF (NYSE: <a class="ticker" href="/stock/ihe#NYSE">IHE</a>)has exposure to Pfizer and Allergen, with both stocks in the top six holdings. In the last 12 months the ETF is up 26.5 percent and it charges an expense ratio of 0.45 percent.

	The SPDR S&amp;P Pharmaceuticals ETF (NYSE: <a class="ticker" href="/stock/xph#NYSE">XPH</a>) also has AGN and PFE in its top holdings at number two and number nine, respectively. The ETF is up 42 percent in the last year and it charges an expense ratio of 0.35 percent.

	The Market Vectors Pharmaceutical ETF (NYSE: <a class="ticker" href="/stock/pph#NYSE">PPH</a>) is different than the first two listed because it invests in companies outside of the U.S.

	Therefore, the ETF can hold more of the stocks mentioned in the merger activity. Similar to the first two ETFs, Allergen and Pfizer are in the top six holdings, but it also owns <a href="http://www.benzinga.com/topic/novartis">Novartis</a>, <a href="http://www.benzinga.com/topic/astrazeneca">AstraZeneca</a>, <a href="http://www.benzinga.com/topic/glaxosmithkline">GlaxoSmithKline </a>and Valeant.

	All six stocks mentioned above are found in the ETF’s portfolio. The expense ratio is 0.35 percent and over the last 12 months it was up 25.4 percent.

	Expect the ETFs to be on the move this week and possibly retest the highs set earlier this year.

Comments

SPDR S&P Pharmaceuticals ETF

Overview

SPDR S&P Pharmaceuticals ETF (ARCA:XPH), Quote.Headers.trade-ideas

Popular Channels

Tools & Features

Partners & Contributors

About Benzinga