Top-Performing Biotech ETFs Of Last Week

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The biotech sector, which was a laggard this year, made a nice comeback last week following the approval of the first new drug to treat Alzheimer's disease in nearly 20 years. Notably, the Nasdaq Biotech Index rallied 3.6% — the biggest jump since Nov 4 — on the news and was up 6% last week.

The Food and Drug Administration gave the green light to Biogen’s (BIIB - Free Report) drug Aduhelm, the first disease treatment intended to stop patients with Alzheimer's disease from losing more memories. The Biogen stock climbed to the highest level in over six years, adding more than $16 billion in its market value on the news.  

The approval for Alzheimer’s disease treatment reinvigorates investors’ interest in a broad biotech and pharmaceutical shares, spreading strong optimism into the space. Alzheimer's treatment could generate billions in sales for Biogen and open the door for other biotech stocks to come up with new treatments to fight the disease. The decision on Aduhelm is one of the three big catalysts for the sector that analysts believe could turn around the flagging sentiment.

Additionally, the renewed surge in meme stocks led to a rally in the sector. Orphazyme AS Sponsored ADR (ORPH - Free Report), which develops therapies to treat genetic disorders, skyrocketed 1387% in the Jun 10 trading session on the chatter building on WallStreetBets and other social media platforms on the potential for short squeezes. Orphazyme was the eighth most-mentioned stock on Reddit's Wall Street Bets. Clover Health (CLOV - Free Report) is also one of the Reddit stocks generating the most WallStreetBets buzz this month, according to Swaggy Stocks. Clover Health gained 67% last week.

The uptrend in the sector is likely to continue given the impressive industry trends including new drug nods, an accelerated pace of innovation, promising drug launches, the growing importance of biosimilars, cost-cutting efforts, an aging population, expanding insurance coverage, the rising middleclass, insatiable demand for new drugs and ever-increasing spending on healthcare. Further, the sector’s non-cyclical nature is an advantage in the current environment, where concerns over rising inflation are rife.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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