After an exuberant third quarter that put biotech indexes near their 2015 highs, all market cap tiers fell in 4Q18, eliminating the first nine month’s gains and losing $291.2 billion in aggregate value.
Median losses were 20-22% for the tiers above $500 million, and 29% for the small caps below that.
No large cap companies valued at $10 billion and up gained in the quarter. Their median decline was 20%, accounting for nearly half of the combined loss in market cap. The least dismal performer in the group was Shire plc, which lost 4% waiting on closure of its acquisition by Takeda Pharmaceutical Co. Ltd. The deal, announced in May, closed on Jan. 7 and was paid for through a combination of cash and Takeda shares. Takeda shares were down 24% in the quarter.
Nektar Therapeutics Inc. took the hardest fall among the large caps. Its shares had dropped 42% on June 4 after the company reported lower-than-expected Phase I/II response rates with NKTR-214 plus Opdivo nivolumab at the American Society of Clinical Oncology (ASCO) meeting. The company went on to lose another 46% in the fourth quarter, erasing about $4.8 billion in market cap.
Companies with valuations of $5-$9.9 billion were down a median of 22%, shedding $44.9 billion in valuation.
Exelixis Inc. led the gainers of the group, rising 11% during the quarter buoyed