1Q Market Review: Divergence of big & small

The valuation gap between the mature biotechnology companies and their younger siblings is widening as Wall Street continues to assign pharma-like valuations to biotechnology companies with sales and earnings.

As the first quarter stock performance attests, big cap biotech continues to dominate investor attention. After posting a 79 percent gain in 1998, the group of biotechnology companies valued over $1 billion was up 12 percent in the first quarter. Five out of the other six market cap subgroups traded down on the quarter (see A3), and the group over $1 billion is the only one to post gains in both the first quarter of 1999 and all of 1998...