The iShares Nasdaq Biotechnology ETF [NASDAQ:IBB], which tracks the Nasdaq Biotechnology Index [NASDAQ:NBI], has surged 7.68% since the beginning of May in anticipation of the annual meeting of the American Society of Clinical Oncology (ASCO), in Chicago, Illinois at the end of the month. 

About 38.57% of the holdings in the index are five big cap biotech companies, Gilead Sciences [NASDAQ:GILD], Amgen [NASDAQ:AMGN], Biogen [NASDAQ:BIIB], Celgene [NASDAQ:CELG] and Regeneron Pharmaceuticals [NASDAQ:REGN], with a combined market cap of over $468 billion. 

Gilead said during its first quarter earnings call in March that its combined revenues from their hepatitis C drug Harvoni (ledipasvir/sofosbuvir) and Sovaldi (sofosbuvir) was $4.55 billion for the first quarter 2015, beating analysts' estimates of $3.61 billion. The company raised its revenue guidance for the full year to between $28 billion to $29 billion, versus its prior forecast of between $26 billion to $29 billion. The consensus estimates are $29.64 billion for revenue and EPS of $10.38 per share.

Gilead’s pipeline includes Zydelig (idelalisib), a PI3K delta inhibitor to treat patients with earlier stages of chronic lymphocytic leukemia (CLL) and indolent non-Hodgkin lymphoma. In July 2014, the U.S. Food and Drug Administration (FDA) approved Zydelig to treat patients with relapsed chronic lymphocytic leukemia (CLL), follicular B-cell non-Hodgkin lymphoma (FL) and small lymphocytic lymphoma (SLL), another type of non-Hodgkin lymphoma.

Amgen, Pfizer [NYSE:PFE], Regeneron and Sanofi [NYSE:SNY] are now in a three-way race to bring the first PCSK9 inhibitor (a monoclonal antibody targeting proprotein convertase subtilisin/kexin type 9), a new class of low-density lipoprotein cholesterol-lowering drug, to the market. The new drug are designed to treat patients with familial hypercholesterolemia (FH), an inherited disease that leads to dangerously high cholesterol, and are expected to have a peak annual sales of over $2 billion. 

In January, the FDA accepted the biologics license application (BLA) for Praluent (alirocumab), a PCSK9 co-developed between Regeneron and Sanofi, for priority review, with a target action date of July 24, 2015. The BLA for evolocumab (AMG 145), another PCSK9 inhibitor drug developed by Amgen, was accepted by the FDA in November 2014. The FDA is expected to review Amgen’s PCSK9 inhibitor by August 27. In January, Pfizer said they are also developing a PCSK9 inhibitor oral pill and vaccine, bococizumab (RN 316), which now is in Phase 3.

In March, Biogen announced data from a pre-specified interim analysis of PRIME, the Phase 1b study of aducanumab (BIIB037), in which the compound demonstrated an acceptable safety profile and positive results on radiologic and clinical measurements in patients with prodromal or mild Alzheimer’s disease. 

The drug is designed to lower levels of toxic amyloid beta in the brain while there's still no consensus over what causes the disease or how cure it. Analysts forecast that Biogen could reap more than $14.5 billion alone in peak annual sales from aducanumab, which would add substantially to the company's value.

From our technical analysis, IBB broke out the ascending triangle in October 2014 with a price projection of $368, determined by adding the width at the top of the pattern to the point of breakout. The IBB broke out the $368 level to the all-time high of $374.97 in March, but pulled back to the 50-day SMA support. Since then, IBB has been moving in the symmetrical triangle. A symmetrical triangle break out could take IBB to test the all-time high, set in March. 

It should be pointed out that IBB was also moving in a rising wedge pattern since the end of March 2014, and broke out the wedge in early February 2015. The price projection for the rising wedge breakout is set at of $423. 

Disclosure: Long Position BIIB, REGN and CELG in Portfolio. No positions in other companies or indices mentioned.