Short interest in US biotech stocks has reached record highs according to data firm Markit.

Drug companies have been under pressure since a pledge by Democrat front-runner Hillary Clinton last year to take aim at excessive pricing.

Meanwhile, a Republican victory in the race to the White House would lead to parts of the Affordable Care Act being repealed and replaced, damaging listed healthcare firms.

The iShares Nasdaq Biotechnology ETF (IBB), which tracks 190 stocks in the industry, is down a 37% from highs seen in mid-2015.

More than two thirds of its constituents now have more than 5% of their shares sold short.

“US elections loom at the end of the year with the outcome impacting stocks in different ways, but shorts sellers have already voted on the biotech sector’s outlook,” said Markit analyst Relte Schutte.

Based on the IBB ETF, stock pickers in the sector would have had a tough time in 2016 as less than 11 constituents have delivered positive returns year-to-date.

Short sellers, on the other hand, are in rude health as more than 50% of stocks in the IBB ETF have declined by more than 30% so far this year.

The worst performing constituent of the fund, falling 82% in 2016 alone, is PTC Therapeutics which still has a fifth of shares currently outstanding on loan.

PTC is followed by Celldex, a company developing disease-specific therapies, which has fallen 79% and still has material levels of short interest at 17.5%.

Two of the most shorted stocks currently among the 190 IBB constituents are Ligand and Merrimack Pharmaceuticals who both feature in the top twenty performers year to date – declining by a relatively low 9% and 1% respectively.