In sight of uncharted territory
How buysiders view risk of correction in 4Q18 as biotech indexes near all-time highs
Strong growth from small- and mid-caps coupled with a late run from large cap biotechs has pushed the sector within sight of its all-time high in 2015. Some buysiders now are seeing red flags of a possible correction: small- and mid-cap names that were overweight most of the year are now viewed as expensive, while a few investors are bemoaning the quality and early stage of new entrants as IPOs continue at a torrid pace.
However, the red flags aren’t serious cause for concern for most investors who talked to BioCentury -- at least not yet. Large caps remain cheap on a relative P/E basis and were the best-performing segment of biotech for the first time in six quarters. In addition, the data show there isn’t as much early stage risk in the 2018 IPO market as there was before the market peaked in mid-2015...