Biotech stocks soared on June 19, easily the best performing group in the market. The NASDAQ Biotech ETF (IBB) was up 2.4% closing a hair below $300, and SPDR S&P Biotech (XBI) was up 3.56% to $74.15. Today's action gives an indication the sector could very well be on the cusp of coming back to life, with the potential for a new group of leaders emerging. (For more, see also: Top 5 Biotech Stocks as of June 2017.) 

XBI Price Chart

XBI Price data by YCharts

Clovis Oncology Inc. (CLVS) stock jumped by roughly 45% on June 19, driven by positive phase 3 trial results for its drug rucaparib, for the treatment of ovarian cancer. The company announced a $250 million secondary offering following the results of the positive trial, taking advantage of the big stock price jump. Analysts are looking for the company to start ramping up revenue over the next couple of years. The outlook is for revenue of around $370 million by the end of 2019. At the end of the March quarter, the company had cash and short-term investments of $408 million. 

CLVS Revenue (TTM) Chart

Also, Exelixis Inc. (EXEL) jumped by nearly 12% after an independent review radiology committee confirmed the primary efficacy endpoint in the company's phase 2 trial for cabozantinib as compared with sunitinib, for untreated advanced renal cell carcinoma. Analysts are currently looking for Exelixis  to see a big jump in revenue over the next couple of years with revenue growing to around $700 million by the end of 2019. 

EXEL Revenue (TTM) Chart

Biogen (BIIB) shares even jumped by nearly 3.5% today after UBS upgraded shares of the stock to Neutral from Sell and raised its price target to $272 from $260. Last week, shares of the stock had taken a hit after it was announced their CFO would be leaving to go to Alexion Pharmaceuticals (ALXN). (For more, see also: Alexion Soars After Biogen CFO Joins Company.)

BIIB Price Chart

The buying spilled over to the rest of the sector because as we look at the IBB and its top 25 holdings, there were only three stocks down on the day. Within the XBI there were only 2 stocks down out of the top 25 stocks. It tells us that the buying we saw today was not just in the top-performing names but spread throughout the group. It seemed to be a strong move into the entire sector. Today's move could prove to be very positive for the group as it has needed a shot in the arm like this for quite some time.

Biotech, for the most part, has had a decent 2017 so far, but the sector as a whole as performed poorly since the summer of 2015. If today's results are an indication for the future, and the group can start getting its act together, then perhaps it is not only a positive for Biotech, but for the market as a whole. 

Michael Kramer is the Founder and Portfolio Manager of Mott Capital Management LLC, a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendation made during the past twelve months. Past performance is not indicative of future performance.