Biotech Index Jumps 10% After SBIO Rebalance

The S-Network Medical Breakthroughs Index, which underlies the ALPS Medical Breakthroughs ETF (SBIO), gained 10.01% in the six trading days beginning June 18 after a semiannual rebalance that added 37 companies and removed 15. The reconstitution ranked among the index’s largest recent reshufflings and coincided with sharp price moves in several constituents.

The index requires each constituent to have at least one drug candidate in Phase II or Phase III U.S. Food and Drug Administration clinical trials and to hold sufficient cash to operate for at least 24 months. Those screens are applied to exclude firms at high risk of running out of funding before trials conclude.

The June 18 changes shifted weights across the index. Several prior large positions were removed, including Alkermes, which had carried a 4.75% weight; Kymera Therapeutics at 4.67%; Spyre Therapeutics at 4.39%; and Mirum Pharmaceuticals at 4.09%, according to VettaFi data.

Existing and newly added names together drove most of the six-day gain. Apogee Therapeutics, an existing holding that had the highest average weight in the index at 4.34%, rose 46.8% and contributed 1.68 percentage points to the 10.01% total return. Definium Therapeutics, added on June 18 with a 1.66% starting weight, climbed 72.1% and added about 1.2 percentage points; its average weight rose to 2.09% during the period as market gains increased its market value. Veradermics, another June 18 addition that entered with a 2.43% position, gained nearly 25% and accounted for roughly 0.59 percentage points of the gain.

Among the 37 new entries, the largest starting allocations went to Veradermics at 2.43%, Dyne Therapeutics at 2.03%, Definium at 1.66% and Kailera Therapeutics at 1.6%, VettaFi data show. The reconstitution replaced a slate of prior heavyweight names with new small- and mid-cap biotech firms, altering index exposures and the distribution of weight across constituents.

SBIO had about $170.4 million in assets and a 0.50% expense ratio. VettaFi serves as the index provider and receives a licensing fee; SBIO is not issued, sponsored or endorsed by VettaFi, and VettaFi has no obligation related to SBIO’s issuance or trading. The June 18 reconstitution was reflected in index weights and the reported six-day performance.