5 Worst Performing Industries in 2023

3. Biotechnology

Industry ETF: Global X Genomics And Biotechnology ETF (NASDAQ:GNOM)

YTD Performance of Industry ETF as of October 31: -29.20%

EY reported that in 2023, there will be five biologic products with substantial revenue, collectively valued in the billions, that will see their patents expire. Furthermore, by 2030, more than 20 products, accounting for nearly $200 billion in annual sales, are anticipated to have their patent protection expire. This makes the biotechnology sector one of the worst performing industries in 2023. 

A biotechnology fund in the red this year is the Global X Genomics & Biotechnology ETF (NASDAQ:GNOM), which aims to track the performance of the Solactive Genomics Index. It invests in companies that could benefit from advancements in genomic science, including those involved in gene editing, genomic sequencing, genetic medicine/therapy, computational genomics, and biotechnology. The ETF launched on April 5, 2019. It features an expense ratio of 0.50%, with a portfolio of 41 stocks. The ETF experienced a drop of 29.20% in stock price year-to-date.

Sarepta Therapeutics, Inc. (NASDAQ:SRPT) is one of the biggest holdings of the Global X Genomics & Biotechnology ETF (NASDAQ:GNOM). Sarepta Therapeutics, Inc. (NASDAQ:SRPT) is a biopharmaceutical company that is actively engaged in discovering and developing treatments for rare diseases. They specialize in RNA-targeted therapeutics, gene therapies, and other genetic-based therapeutic approaches. According to Insider Monkey’s second quarter database, 53 hedge funds were bullish on Sarepta Therapeutics, Inc. (NASDAQ:SRPT), down from 57 funds in the prior quarter. Kurt Von Emster’s VenBio Select Advisor is the top shareholder of the company, with a position comprising 4.63 million shares worth approximately $530 million.

Here is what Artisan Mid Cap Fund has to say about Sarepta Therapeutics, Inc. in its Q1 2021 investor letter:

“We ended our campaign in Sarepta Therapeutics. Sarepta Therapeutics is a leader in Duchenne muscular dystrophy (DMD) drug development. Shares were pressured during the quarter amid a disappointing clinical trial outcome for its DMD gene therapy. We believe the odds of FDA approval for this therapy are lower and the timeline longer. Fortunately, we controlled for this risk by keeping this holding in the GardenSM. While Sarepta’s pipeline of gene therapies for neuromuscular disorders remains attractive, we exited our position given this setback. We believe CropSM holding Catalent is a better risk-adjusted way to participate in these opportunities. Catalent is a leader in gene therapy manufacturing and one of Sarepta’s key partners.”