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Big cap bloodletting

Why investors slashed $53.1 billion in value from six biotech bellwethers

Performance of biotechs valued at over $10 billion was already dwindling throughout 2017 before a flood of disappointing earnings began to roll in for several of the largest companies.

In the days since Oct. 19, which kicked off the bloodletting with a clinical miss for Celgene Corp., investors have wiped away an aggregate of $53.2 billion in market cap for six large cap companies. The slide threatens to sour generalists -- who were reported to be tiptoeing back into biotech at the end of 3Q -- on the sector as a whole.

As cracks in some of the large caps’ growth stories have appeared, three buysiders who spoke to BioCentury said the bellwethers need to do M&A to add growth, but they still see buying opportunities.
It’s also possible the weakness could make some of these companies targets for opportunistic big pharmas who are looking to fill their barren pipelines.

“All of these stocks are now show-me stories. They have to do some M&A to add new products.”

Otello Stampacchia, Omega Fund

The six companies hosed after reporting earnings -- Alexion Pharmaceuticals Inc., Amgen Inc., Biogen Inc., Celgene,

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