NEW YORK (Reuters) - U.S. biotech shares extended their recent downward spiral on Tuesday as concerns about drug pricing continued to plague the sector while disappointing news from Illumina and other companies added to selling pressure.
The Nasdaq Biotechnology index, down 4 percent, has now fallen about 17 percent since just before Hillary Clinton, front-runner to be the Democratic nominee in next year’s U.S. presidential election, vowed on Sept. 21 to take steps to curb high drug prices.
Concerns about drug pricing were exacerbated by a Wall Street Journal report late Monday on the industry’s practice of raising prices to compensate for sluggish demand and rising competition.
Of the 142 constituents in the biotech index, just 10 were trading higher, while the S&P 500 health care index was down 2.4 percent.
“There’s a flurry of things that are coming together to drive a lot of fear and panic,” said Michael Yee, biotech analyst for RBC Capital Markets. “Obviously continued concern in headlines around drug pricing, particularly with an article out in the media about significant price increases even for old drugs that are declining in volume.”
Also driving losses in the biotech group was a disappointing profit outlook on Monday from Illumina Inc, whose shares were down 12.4 percent on Tuesday, analysts said.
Also issuing disappointing news was Exact Sciences. The company’s shares dropped 46 percent to $10.05 after it received a surprise negative reimbursement decision on its colon cancer test, Cologuard.
The iShares Nasdaq Biotechnology ETF was off 4.4 percent.
Additional reporting by Lance Tupper; Editing by Bernard Orr