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Biotech stocks are on fire as Obamacare repeal vote looms

  • The SPDR S&P Biotech ETF (XBI) climbed 4.7 percent on Wednesday, putting it on track to post its best weekly performance since March 13.
  • The biotech ETF has already outperformed the broader market year to date, rising 30 percent in the period.

Biotech stocks have been on a tear this week.

The SPDR S&P Biotech (XBI) exchange-traded fund climbed 4.7 percent on Wednesday, putting it on track to post its best weekly performance since March 13. The biotech ETF has already outperformed the broader market year to date, rising 30 percent in the period. The S&P 500 has gained about 9 percent in 2017.

The rise in biotech helped the broader S&P health care sector rise about 1 percent on Wednesday.

"To boil it down, it comes down to valuation and momentum," said Mike Bailey, director of research at FBB Capital Partners. "I think a lot of investors are dusting off the old biotech handbook and looking at these names once again."

Health care has been a closely watched sector of the market as the White House and the Republican-majority Congress attempt to repeal and replace Obamacare. Next week, the Senate is expected to vote on a health-care reform bill.

"The Senate will soon have a chance to turn the page on this failed law," Senate Majority Leader Mitch McConnell said on Tuesday. "We have to act, and we are."

—CNBC's Gina Francolla contributed to this report.