Biotech Consolidation

The consolidation plays in Biotech have driven the index higher, making a good year even better for the industry.

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Roche bid to increase its stake in Genentech to 100% and then Bristol Meyers Squibb followed suit with ImClone Systems.

The rush to consolidation drove the Dow Jones US Biotechnology Index higher through the middle of the week even though the industry had already outperformed YTD.

The index pulled back at the end of the week on news that Biogen Idec and Elan reported two new cases of a potentially fatal side effect associated with their multiple sclerosis drug Tysabri.

Biotech ETFs include the Nasdaq Biotechnology Index Fund (IBB) and the SPDR S&P Biotech ETF(XBI).