The move comes as President Trump looks to cut billions in funding from the NIH programs. From Bloomberg:
President Donald Trump’s administration proposed cutting $1.23 billion from the NIH’s budget this fiscal year and $5.8 billion next year. Most of the proposed 2017 cuts would have come from reductions in research grants. But Congress increased the NIH’s budget for this fiscal year by $2 billion in the spending bill it passed last week to fund the government through September.
Those government subsidies are highly important for biotech firms, because the NIH funds the majority of the basic research that kicks off their quest for new drug treatments.
Today’s meetings were attended by the CEOs of such major biotech companies as Vertex Pharmaceuticals, Regeneron, and Celgene. Bill Ford, CEO of investment firm General Atlantic was also present, and issued the following statement afterwards:
“The United States is a global leader in bioscience thanks to a rich ecosystem where government, medical research institutions, and the private sector work together to generate incredible insights and innovations. Following today’s discussion it is clear that the White House is committed to further extending America’s leadership position in this vital industry.”
These meetings could have major ramifications for biotech stocks and ETFs in the coming months and years, so investors are well advised to keep tabs on the developments.
The iShares NASDAQ Biotechnology Index ETF (NASDAQ:IBB) was trading at $288.91 per share on Monday afternoon, down $6.96 (-2.35%). Year-to-date, IBB has gained 8.87%, versus a 7.11% rise in the benchmark S&P 500 index during the same period.