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Pharma company Incyte is moving to the S&P 500, and the stock is rallying

Incyte
Source: Incyte

Shares of Incyte closed more than 7 percent higher Friday, on news that the pharmaceutical company will join the S&P 500.

Drug development company Incyte will replace Spectra Energy on the S&P 500, effective at the open of trading next Tuesday, S&P Dow Jones Indices said in a press release on Friday.

Such index changes require fund managers whose investments track the S&P 500 to reallocate their holdings, including buying shares of stocks being added to the benchmark index.

Spectra is leaving the S&P 500 given its pending acquisition by Canada-based Enbridge, an oil and gas pipeline operator, the release said. U.S.-listed shares of Enbridge were 1 percent lower Friday, while Spectra traded little more than 0.5 percent lower.

Incyte specializes in oncology products and will be added to the S&P 500's biotechnology sub-industry index, according to the release.

Incyte shares hit a 52-week high Friday and are up about 30 percent for the year so far.

Incyte year-to-date performance

Source: FactSet