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1Q Stock Wrap-Up: Out fast at opening bell

Mid-caps lead biotech out fast in 1Q13; large-caps up third consecutive quarter

For the second year in a row, biotech put together a strong showing in the first quarter with all market segments gaining ground. The sector was led by mid-caps, which closed up 16%.

Large caps were close behind with a 15% gain, marking three straight quarters in the black. Celgene Corp. was up 48% for the quarter, the strongest showing in the $5 billion-plus tier.

The move was driven in part by positive data from two Phase III trials of apremilast to treat moderate to severe plaque psoriasis. Celgene expects to seek U.S. and European approval for the indication next half.

Two other events helped drive up the company's stock. In January, Celgene said it is targeting net product sales of $12 billion in 2017. In February, it announced a $600 million accelerated share buyback program under its current repurchase program.

Product commercialization was the name of the game among the mid-caps. Ironwood Pharmaceuticals Inc. and Isis Pharmaceuticals Inc. each closed the quarter up at least 62%.

Early in the quarter, Ironwood raised $175 million in debt, which the company said would be used to support the launch of Linzess linaclotide. Ironwood and partner Forest Laboratories Inc. launched the drug last December in the U.S. to treat irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC) in adults.

Kynamro mipomersen was approved and launched in the U.S. during the quarter to treat homozygous familial hypercholesterolemia (hoFH). Sanofi's Genzyme Corp. has rights to the drug from Isis, which received a $25 million milestone payment when the drug was approved and is eligible for 30-50% of all commercial sales.

Vivus Inc. was the laggard of the $1-$4.9 billion group, losing 18% in the quarter. The biotech recorded $2 million in 4Q12 net product revenues for Qsymia phentermine/topiramate, well short of the Street's $3.1 million forecast. Vivus launched the obesity drug in September.

Japanese cancer companies NanoCarrier Co. Ltd. and OncoTherapy Science Inc. led the way for the $200-$999 million segment.

The companies are riding a wave of interest from retail investors in the Japanese market. For the quarter, the Mothers index of high-growth and emerging stocks on the Tokyo Stock Exchange was up 59% while the Nikkei 225 gained 19%. In that time, the BioCentury 100 rose 16% and the S&P 500 was up 10% to close the quarter at an all-time high of 1,569.19 (see BioCentury, Feb. 11).

NanoCarrier was up 281% for the quarter, while OncoTherapy was up 125%. NanoCarrier's NK105, which is partnered with Nippon Kayaku Co. Ltd., is in Phase III for breast cancer. OncoTherapy's OTS-102 is in Phase II/III testing for pancreatic cancer. It is partnered with Otsuka Pharmaceutical Co. Ltd.

Affymax Inc. was the poorest performer of the $200-$999 million group. The company plummeted 93% after it and partner Takeda Pharmaceutical Co. Ltd. recalled once-monthly anemia drug Omontys peginesatide following postmarketing

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