12:00 AM
Apr 06, 2009
 |  BioCentury  |  Finance

Micro signs of life

Biotech continued to display the characteristics of a defensive sector last quarter, although many shareholders would have struggled to make money from the group, as all the indices were in negative territory. Nevertheless, only half the 568 public biotech companies tracked by BioCentury posted share price declines over the quarter, indicating there was money to be made by making the right picks.

The BioCentury 100 was off 3.9%, while the S&P 500 and Dow Jones indices slipped 11.7% and 13.3%, respectively (see "Index Performance," & "London vs. Europe").

Interestingly, while many fund managers polled at the start of the year believed the largest companies would most likely deliver the best returns, the best performing tier in 1Q09 was the sub-$200 million group, which rose 4.6% over the quarter following a terrible 2008, during which the group plummeted 67% (see "Results by Market Cap").

Among the top tier biotechs worth over $2 billion, nine companies posted gains while 16 declined. The best performing stock was microarray and genetic services company Illumina Inc., which has been the subject of M&A speculation. Its shares rose 43% for a market cap increase of $1.37 billion, just behind the $1.4 billion added by Biogen Idec Inc. in the first quarter.

Illumina's gain was initially triggered by positive 4Q results when the company posted net income of $28.9 million or $0.22 per share, compared to a net loss of $4 million or $0.04 per share in the prior-year period. Biogen Idec was boosted by expectations it could be an M&A target.


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