2nd Quarter Stock Preview: Small winners add up

Buysiders have been predicting that 2006 would see a narrowing of the gap between the performance of big and small biotechs. Thus far, that assumption has panned out, with the smaller plays gaining ground on the big group. Now that investors have seen strong returns in every market cap band, the question is whether money will remain in the sector.

Buysiders and bankers think it will. They expect late-stage clinical companies and those on the cusp of commercialization to be the leaders, and they think the big slate of near-term milestones should keep money in the sector. In addition, buysiders say a number of names have been de-risked on the clinical front and offer the chance for significant sales upside. ...