What: The JP Morgan Healthcare conference kicked off today, but the publicity isn't helping the biotech sector. The iShares Nasdaq Biotechnology ETF (NASDAQ:IBB) ended the day off 3.4%, dragging Ionis Pharmaceuticals (NASDAQ:IONS), Geron (NASDAQ:GERN), and Medivation (NASDAQ:MDVN) down with it.

So what: Ionis Pharmaceuticals and Medivation are scheduled to present at the conference today, but not until after the closing bell, so the presentations don't seem to be the reason for the decline. Geron isn't even presenting at JP Morgan this year.

Yet all three companies fell substantially more than the broader index.


Today's Move (Decline)

Ionis Pharmaceuticals






Ionis Pharmaceuticals' CEO Stan Crooke sold shares recently, but it was announced in an SEC Form 4 on Thursday, so investors had all day on Friday to process the information. Besides, he sold share that he was given as stock options, so you can think of it as part of his pay. Crooke still owns over 750,000 shares of the company he founded.

Medivation named Marion McCourt as the new chief operating officer, but that doesn't seem to be a reason for shares to be down so much since it's a new position at the biotech.

It's possible that someone got an advanced look at the slides that contain negative news. Or -- probably more likely -- that the companies had one-on-one meetings with investors that got spooked about something said in the meeting.

Now what: It's been a rough start of the year for biotechs, and there's no telling if it it'll end anytime soon. After such great returns over the last few years -- the IBB is up more than 200% over the past five years, compared to a 51% increase in the S&P 500 -- a pullback was inevitable.

The good news for investors buying individual stocks -- rather than an ETF -- is that companies can trade in the opposite direction than the index if they release positive data or increase sales.

Ionis Pharmaceuticals has 38 drugs in development; it certainly must have a few hits in its pipeline. Medivation will likely trade based on sales of Xtandi, its only drug on the market, but the company is testing the drug in other cancers, which will eventually contribute to sales; Medivation's valuation will increase if the clinical trials are successful. Geron is waiting on clinical trial results for its cancer drug imetelstat, which it has partnered with Johnson & Johnson on.

If any of those binary events are successful, today's drop on general sentiment -- assuming it was nothing more than that -- won't matter one bit.

Check out the Fool's roundup of news from JP Morgan.

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