Monday was a possibly record-setting day for biotech IPO announcements. Tuesday looks to have been the same for secondary offerings in the industry.

Eight different biotechs announced equity financing efforts that day, and another three announced on Wednesday. We only have pricing for some of the offerings, but Bloomberg puts the total amount firms hope to raise so far at more than $1.2 billion. 

The market was less than enthused: Every single one of the companies that filed on Tuesday traded lower on Wednesday, several of them down as much as 20 percent. No one quibbles with the idea that biotechs need to raise money to develop drugs or operate. But the timing seems off: These secondaries come in the middle of a nasty selloff in the broader market -- not exactly the most favorable environment. It is a far cry from the early part of 2015, when biotechs often saw big price gains after a secondary. 

It is at least slightly better timing than last autumn, when pharma and biotech were getting hammered. And the filings come just ahead of JPMorgan's health care conference next week, a good time to talk up a company trying to raise money.

David Fuller's view

This week’s slide by the Nasdaq Biotechnology Index provides further evidence that last year’s runaway stock market success story has an extended top formation, which will bring valuations for its more expensive shares closer to Earth.   

For advocates of factual technical analysis, this pattern shows the Type-2 (of 3) top formation patterns with right-hand extension, as taught at The Chart Seminar. A sustained break back above 3600 would be required to question this hypothesis. 

The good news is that as tech valuations become more reasonable, on average, this generally high-growth sector will have broader appeal and no longer be just a momentum play, currently out of form.