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2Q Stock Wrap-Up: Stand and deliver

Partnering, financing, Phase III data provided big bumps to biotechs in 2Q11

Several market cap bands tracked by BioCentury did well last quarter, as investors rewarded late-stage data and transformative deals.

The NYSE Arca Biotechnology Index and the BioCentury 100 each gained 7% in 2Q, while the NASDAQ Biotechnology Index was up 6%. The best performance came from biotechs with market caps over $5 billion, which had an average gain of 5%.

The BioCentury London Index was up 13%, driven in part by BTG plc's 23% pop. The company's Zytiga abiraterone acetate to treat metastatic, castration-resistant prostate cancer (CRPC) was approved and launched last quarter.

Biogen Idec Inc. was the leader among the large caps. It rose 46% on positive Phase III data for BG-12 in multiple sclerosis (MS) and an updated EU label for autoimmune drug Tysabri natalizumab that now includes anti-JC virus antibody status as an additional factor to aid in stratifying patients at risk of progressive multifocal leukoencephalopathy (PML).

The worst performer in the group was Actelion Ltd., which lost 22%. Its shares slid as rumblings of a takeout faded away after activist investor Elliott Advisors was defeated at a May shareholder meeting. The company later announced a possible spinout of non-core assets.

The $1-$4.9 billion group added 4%. Elan Corp. plc and Alkermes Inc. were the best performers after Alkermes agreed to buy the Elan Drug Technologies drug delivery business. Elan will receive $500 million in cash and a 25% stake in newly formed Alkermes plc when the deal closes this quarter or next. Elan climbed 65%, and Alkermes added 44% in 2Q.

Those weren't the only biotechs to pop on partnership news. Cubist Pharmaceuticals Inc. posted a 43% gain following a deal to co-promote Optimer Pharmaceuticals Inc. antibiotic Dificid fidaxomicin in the U.S. The day prior to the deal, FDA's Anti-Infective Drugs Advisory Committee voted 13-0 that Dificid was safe and effective at treating Clostridium difficile-associated diarrhea (CDAD). Dificid was approved in May. Optimer added 1% on the quarter.

Oral HCV play Pharmasset Inc. continued the upward march it began in 1Q - adding 43% in 2Q to reach a $4.2 billion market cap on continued optimism for the prospects of its HCV candidates. Most advanced is its PSI-7977, which is in Phase IIb testing.

Seattle Genetics Inc. gained 33% in advance of a July 14 FDA Oncologic Drugs Advisory Committee (ODAC) meeting for brentuximab vedotin

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