We all fall down

Biotech stocks down across the board in 4Q18 from 3Q18 highs

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

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