2Q Stock Wrap-Up: If it ain't broke

Large caps close 2Q13 up for fourth consecutive quarter; all segments up in 2013

Despite one segment that finished the second quarter in the red, all market cap groups are still up for the year. In 2Q13, the sector was led by large caps, which closed up 4%, marking four straight quarters in the black.

Vertex Pharmaceuticals Inc. led the large caps. The company's 46% jump during the quarter was driven by positive data from a Phase II trial of VX-661 to treat cystic fibrosis (CF).

Theravance Inc. was the biggest gainer in the $1-$4.9 billion segment, with a 63% gain thanks to a surplus of regulatory and deal news, including plans in April to split into two publicly traded companies to separate late-stage partnered respiratory assets from R&D. The stock rose in April after positive briefing documents and FDA panel vote for Breo Ellipta fluticasone furoate/vilanterol to treat airflow obstruction in patients with chronic obstructive pulmonary disease (COPD).

Theravance's stock peaked in mid-May after FDA approved Breo and Elan Corp. plc said it would pay $1 billion to Theravance in exchange for royalties. Although the stock lost ground as the deal fizzled, Theravance did get another bump at the end of 2Q on rumors of a takeout by partner GlaxoSmithKline plc.

The laggards in the mid-cap space included Ironwood Pharmaceuticals Inc. and Infinity Pharmaceuticals Inc. Ironwood lost 46% in 2Q to close below where it began the year.

Early in the quarter, Ironwood and Forest Laboratories Inc. announced disappointing first quarter sales of Linzess linaclotide. The partners 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.

The stock fell again in May when Ironwood raised $136.5 million in a follow-on.

Infinity's 67% drop appears to have stemmed from two data events. The stock fell 23% after Gilead Sciences Inc. reported positive Phase II data in hematologic malignancies for idelalisib, a small molecule inhibitor of phosphoinositide 3-kinase (PI3K) delta.

Infinity's IPI-145 is an oral inhibitor of PI3K delta and gamma in Phase I testing for advanced hematologic malignancies. The stock fell further in June after Phase I data for IPI-145 presented at the American Society of Clinical Oncology meeting raised safety concerns.

Four companies in the $200-$999 million segment gained more than 100% in 2Q13: neurology play Acadia Pharmaceuticals Inc., cancer company Clovis Oncology Inc., cyclic peptide specialist PeptiDream Inc. and stem cell company ReproCell Inc.

Acadia was up 129% for the quarter. In April, FDA said existing data, including a single Phase III trial, were sufficient to support an NDA for pimavanserin to treat Parkinson's disease psychosis (PDP). Acadia plans to submit the NDA around YE14 for the small molecule serotonin (5-HT2A) receptor inverse agonist.

Clovis gained 134%

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