Wall Street's enthusiasm for the promise of biotech is showing up in shares of XBI, one of the largest biotech exchange-traded funds. The State Street SPDR S&P Biotech ETF is up more than 10% so far in June as the sector continues a remarkable stretch of gains over the past year.

XBI has "moved higher a record 12 of 13 months," Mizuho healthcare sector specialist Jared Holz wrote Friday. In the three of those months, including June, XBI has gone up more than 10%.

Overall, XBI has seen net inflows of $1.3 billion since May 30, 2025, as of Thursday's close, while shares of the fund soared 91.4% during that period.

The momentum is forcing investors to make decisions accordingly because the sector hasn't traded "this consistently well in years -- arguably ever," Holz told Barron's.

Rather than any single name driving the trend, Holz says multiple factors are at play: a better appreciation for risk factors in the sector, and recent clinical trial results from companies like Revolution Medicines and Tango Therapeutics -- both with experimental therapies for pancreatic cancer.

M&A activity is having a strong impact. "It's impossible to ignore what's happening from an acquisitions standpoint," says Holz.

Take AbbVie's plan to purchase biotech firm Apogee Therapeutics for $10.9 billion, announced June 22, bringing a pipeline of potential treatments for conditions such as atopic dermatitis and asthma. The deal price, at $135.11 per share, amounted to a 49% premium on Apogee's previous close.

Apogee isn't expected to generate revenue for five years, Holz says, which goes to show that longer-term revenue stories are viable.

"When you've got large-cap pharma underwriting such big transactions, I think that's giving investors the sense that they have to do the same thing," he says.

Shares of XBI were trading about 1% higher Friday afternoon and up more than 24% so far in 2026.

Write to Catherine Dunn at catherine.dunn@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 26, 2026 15:38 ET (19:38 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.