Bargain shopping

Biotech winners, losers in 3Q17

With all companies valued over $1 billion increasing a median of at least 16.8% in 1H17, investors went bargain shopping in the $500-$999 million tier in 3Q17. The group outperformed all other market cap bands, aided by outstanding after-market performance from a trio of new IPOs.

Companies valued over $10 billion increased a median of just 1.7% last quarter, though gainers outpaced decliners 14 to nine and $139 billion of equity value was created (see “Results by Market Cap”).

Vertex Pharmaceuticals Inc. was the top performing biotech, increasing 18% to end 3Q17 valued at $35.5 billion.

On July 18 the company reported that three different triple combinations adding either VX-440, VX-152 or VX-659 to tezacaftor (VX-661) and Kalydeco ivacaftor improved lung function in patients with one delta F508 cystic fibrosis transmembrane conductance regulator (CFTR) mutation and one minimal function mutation.

The next day the company touched an all-time intraday high of $167 and added about $6.9 billion in market cap.

On the flip side, Teva Pharmaceutical Industries Ltd. had a quarter to forget.

The company lost 47% of its value after reporting 2Q17 financials that missed expectations, cut its 2017 guidance and slashed its dividend by 75%.

Stocks in the $5-$9.9 billion tier declined a median of 1.7%, turning negative for the first time this year and reversing some of the group’s 1H17 gains. Nonetheless, the group added $5.8 billion in market cap on two major catalysts.

Kite Pharma Inc. led the charge with a 73% gain following Gilead Sciences Inc.’s Aug. 28 announcement that it would acquire the chimeric antigen receptor (CAR) T cell player for $11.9 billion. The deal closed on Oct. 3.

Alnylam Pharmaceuticals Inc. got a 47% bump after it and partner Sanofi reported positive top-line data for patisiran (ALN-TTR02) in the Phase III APOLLO trial in 225 patients with familial amyloidotic polyneuropathy (FAP).

Strong safety data removed an overhang on the

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