“The Biggest Biotech Bombshell in Years,” declared The Motley Fool of Biogen’s market-moving announcement October 22 that it was planning to file for FDA approval of the Alzheimer’s disease (AD) candidate aducanumab, being co-developed with Eisai, despite halting two failed Phase III studies of the drug in March. Investors flocked to Biogen stock, sending the company’s stock price surging 40% before the start of trading that day. When the market closed, Biogen shares finished the day 26% higher at $281.87.
“This news, in our view, means the FOMO [fear of missing out] component is firmly back to occupy investor mind share as the multi-billion AD market is simply too large to ignore,” Canaccord Genuity analyst Sumant Kulkarni and associate Jia Min, CFA, wrote in an October 23 note to investors.
That FOMO appears to explain why Biogen wasn’t the only biotech company whose shares jumped on the news. Stocks for most biotechs rose in the days that followed the aducanumab announcement, judging from activity among the three top electronic transfer funds (ETFs). In the seven trading days since Biogen sent shares soaring, the largest ETF—the iShares Nasdaq Biotechnology ETF (IBB)—rose 3.9%, going from $103.58 on October 21 to $107.59 on October 30. The SPDR S&P Biotech ETF (XBI) rose 2.1%, from $80.09 to $81.80; Invesco Dynamic Pharmaceuticals ETF (PJP) rose 3.7%, from $57.65 to $59.81; while the First Trust NYSE Arca Biotech ETF (FBT) increased 2.9, from $127.40 to $131.07.
The Biogen surge enabled IBB to record an increase from its price on October 30, 2018, as the fund rose 3.8% from $103.63. Also rising year-over-year was XBI, up 4.4% from $78.36. However, year-over-year, pharma-heavy PJP is down 9.9% from $66.35, while the limited 30-stock FBT is down just 1.2% from $132.69.
Absent any market meltdown in coming week, 2019 is seeing the first year-over-year aggregate increase since 2015 in the total market capitalization of the 25 biotechs with the highest market capitalization or “market cap” as of October 30—to $963.495 billion, up 4.9% from $918.85 billion reported by GEN’s “Top 25 Biotech Companies of 2018.” This overall increase comes despite an even split among gainers and losers, with 12 companies reporting growing market caps, another 12 companies shrinking (one company was not public last year so a comparison was not applicable).
The total market cap of GEN’s top 25 companies has shrunk from an all-time high of $1.225 trillion in GEN’s Top 25 Biotech Companies of 2015—to $1.047 trillion reported by GEN’s Top 25 of 2016 and $1.007 trillion tallied by the top 25 companies the following year.
Below is GEN’s updated list of 25 biotech companies, ranked by their market cap as of October 30, 2019, as furnished by the exchanges on which they trade their shares, or by other publicly available sources. Figures are rounded off to the nearest 10th except for two companies (Nos. 20 and 21) which were hundredths of a point apart.
The smallest company listed this year has a market cap of just over $10 billion, compared with $9.4 billion for last year’s 25th ranked company, which fell out of this year’s Top 25.
Companies based outside the U.S. accounted for more than half (14) of the companies ranked on this year’s Top 25 list, one more than on GEN’s 2018 A-List. The largest portion of overseas companies are the five biotechs based in China (including Hong Kong), followed by two companies based in South Korea; two based in Belgium; another two in Denmark; and one each based in Australia, India, and Ireland. One company on this list is headquartered in the U.S., but domiciled for tax purposes in the U.K. Only 10 of the Top 25 biotechs (including just six of the top 10) are both domiciled in the U.S. and maintain key operations stateside.
Just missing the list at No. 26 is Alnylam Pharmaceuticals, which had a market cap of just over $9.7 billion on October 30, followed by Neurocrine ($8.947 billion) and Teva Pharmaceutical Industries, which last year ranked No. 15 with a $20.4 billion (NIS 75.9 billion) market cap. Teva’s market cap has fallen by more than half (57.8%) since then, to $8.635 billion (INS 30.443 billion).
24. Sinopharm Group
$10.6 billion (HK$82.8 billion)
Hong Kong Exchange (1099)
$11.4 billion (€10.2 billion)
Euronext Amsterdam (GLPG)
22. BioMarin Pharmaceutical
21. Sun Pharmaceutical Industries
$14.13 billion (INR 1.001 trillion)
National Stock Exchange of India (SUNPHARMA)
$14.14 billion (DKK 94.6 billion)
Nasdaq Copenhagen (GMAB)
19. Yunnan Baiyao Group
$15.2 billion (CNY 107.3 billion)
Shenzhen Stock Exchange (000538)
$15.8 billion (€14.1 billion)
Euronext Brussels (UCB)
17. Seattle Genetics
16 Hansoh Pharmaceutical Group
$17.8 billion (HKD 139.5 billion)
Hong Kong Stock Exchange (3692)
14. WuXi AppTec
$18.9 billion (CNY 133.5 billion)
Shanghai Stock Exchange (603259)
$21.8 billion (KRW 25.3 trillion)
KRX Korea Exchange (207940)
12. Samsung Biologics
$21.9 billion (KRW 25.4 trillion)
KRX Korea Exchange (207940)
11. Alexion Pharmaceuticals
10. Regeneron Pharmaceuticals
9. Vertex Pharmaceuticals
7. Jiangsu Hengrui Medicine
$56.6 billion (CNY 398.8 billion)
Shanghai Stock Exchange (600276)
4. Gilead Sciences
$80.3 billion (A$115.9 billion)
2. Novo Nordisk
$103.5 billion (DKK 692.3 billion)
Nasdaq Copenhagen (NOVOB)