Ebb & Flow

Historically, when biotech markets turned south, investors headed to the big cap group in droves to ride out the storm. However, investors following that strategy this year have been stung significantly harder than the general markets. The seven biotechs valued above $10 billion at the beginning of the year have collectively lost $62.4 billion (40%) of market cap so far this year (see "Safe Havens?").

By comparison, the Amex Pharmaceutical Index - to which most of these companies would be "comped" on a valuation basis - has fallen only 21%. The BioCentury 100 is down 44% on the year, but the comparison is misleading thanks to autocorrelation...