Article Excerpt:
TWST: Jason, what has gone on in the biotech space from a stock market perspective year to date?Dr. Kantor: I think that the first quarter of this year was the tail-end of what was about a 12-month rally in the group, and things were pretty ugly from March until very late in the summer. We are now beginning to see the sector turn around a little bit, and you can see that in the BTK Index, and I also think that some of the recent outperformance is pretty broad-based. One of the things that might be triggering that is an increase in M&A activity; we have seen a couple of recent transactions that are notable. In addition, I think that there have been some investors rewarded significantly for taking some risk. We have seen some really significant performance on positive clinical data and positive regulatory news. Those are good signs. We are also seeing stocks hold up well in the face of the negative news, such as Genentech's (DNA) recent quarter. So I think that all of those are good bullish signs for the sector. We will see whether or not it's sustainable going to the end of the year and into next year.
TWST: Kevin, what's your take on how the market has treated the space so far
this year?
Mr. DeGeeter: I think that Jason's points are spot on. The one thing I would add
is that we are seeing a pretty big divergence between big cap names such as
Amgen (AMGN) and Genentech, which are back around the levels we reached in April
before the sector sold off, and the smaller cap arena where the stocks are still
considerably below the levels achieved in the spring. We are looking for market
cap rotation over the near term with a little better performance in the small
cap names.
Tickers included in this excerpt: AEZS, AIS, ALXA, CELG, GILD, ONXX, VRTX, ZGEN
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