Biotech iQ Recap for the Week Ending May 30, 2025
Welcome to the BiQ Weekly Recap #19!
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Weekly Overview
The index closed last Friday at 79.06, opened Monday at 78.10, and closed Friday at 79.16 for a weekly gain of 0.0%. It reached an intra-week high of 80.58 and a low of 78.06 for an intra-week range of 3.2%.
Zooming out to the one-month chart, we can see that following the strong run in April, the index still seems to be struggling to find direction, and volume remains muted. I believe markets still face significant headwinds from ongoing trade negotiations and uncertainty regarding the future direction of the FDA. I expect we can add anxiety over the implications of MFN (Most Favored Nation) pricing to the list as well. We still have a long way to go before we're clear of these headwinds, and it will take time to work through these uncertainties. I continue to maintain elevated liquidity levels and aggressively sell Call options while waiting for the index to find its footing.
Zooming out further to the five-year chart, we can see that the index has bounced off the 64 to 66 level three times: in June 2022, October 2023, and most recently in April 2025. While I am cautiously hopeful that we may see a recovery to the 88-90 resistance level, volatility remains elevated, and it's equally possible the index revisits recent lows. It's tough to make any predictions, so my portfolio positioning remains cautious.
Biotech Industry News & Commentary
As many biotech investors are painfully aware, the gene therapy space has been very challenging over the past few years. Back in 2020 and 2021, which now seems like a lifetime ago in biotech years, interest in gene therapies was at a peak. VC's pumped just under $8B into gene therapy companies in 2020 and over $8B in 2021. However, in 2022, VC investments dropped to around $4B, then to $3.5B in 2023, and finally to $1.5B in 2024. The effect of this change in investor interest can be clearly seen in the 5-year charts for gene therapy pioneers like CRSP, NTLA, BEAM, and many others.
Investors, especially biotech investors, are often easily distracted. While investor interest may have moved on as the industry has seemingly retreated into the shadows, gene therapy companies have continued to work steadily in the background towards the same goal they've always had: to develop one-time cures for a host of human diseases.
The sheer diversity across gene therapies can appear daunting at first glance. Investors must grapple with a variety of modalities, including gene additions (RGNX, MGTX, PGEN, etc.), gene silencing (ARWR, ALNY, etc.), gene editing (CRSP, NTLA, etc.), prime editing (PRME), and base editing (BEAM). Delivery vectors can range from the more commonly used viral vectors and lipid nanoparticles to emerging technologies, such as exosomes (which I consider a very promising area of research), as well as physical methods, including electroporation.
Recently, several gene therapies, such as ZOLGENSMA, ELEVIDYS, and ZEVASKYN, have begun to reach the market, offering new hope to patients with debilitating diseases. Many more are in the late stages of clinical development or pending FDA approval. From my perspective, there has never been a better time for forward-looking investors to take a renewed interest in the space, especially while valuations continue to remain at all-time lows despite the significant progress made by gene therapy companies.
The Biotech iQ Active Portfolio currently includes four promising late-stage gene therapy names, and I actively follow several others as I await signs of additional derisking.
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BiQ Realized Gains & Losses
Biotech iQ is oriented towards long-term investing; it is not a short-term or active trading service. Typically, I only fully exit positions when the long-term thesis and risk/reward no longer appear attractive. The BiQ Realized Gains & Losses spreadsheet displays all realized gains and losses since BiQ was launched in 2024. Premium members can also view the current performance of the BiQ Active Portfolio on the Active Portfolio page of the Biotech iQ website.
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