While several biopharma giants (including Amgen, Novartis, and Merck & Co.) reported third-quarter earnings that beat expectations in recent days, biotechs appear to have been caught up in the past month’s stock market swoon. As of October 26, according to Zacks Equity Research, the stock prices of companies in its “medical-biomedical and genetics” sector, which includes smaller as well as larger biotechs, had fallen 10.3% over the previous six months, compared with a 1.6% increase for the overall S&P 500.
Even more sobering: three key exchange-traded funds (ETFs) consisting of biopharma equities have shown declines during October that wiped out most, or nearly all, of the gains made by investors over the past year. As of October 31, the iShares Nasdaq Biotechnology ETF (IBB) stood at $104.07, down 0.6% from $104.73 on the same date a year ago. The Invesco Dynamic Pharmaceuticals ETF (PJP) finished Halloween at $66.29, up 6.1% over the past year from $62.46, while the First Trust NYSE Arca Biotech ETF (FBT) showed the largest year-over-year increase, rising 10% to $133.76 from $121.07 on October 31, 2017.
Between that date and September 28, however, investors in all three ETFs enjoyed much healthier gains: 30.9% for FBT (which finished September at $158.49), 17.7% for PJP ($73.5 1) and 16.4% for IBB ($121.94).
Reasons for the biotech declines have ranged from the clinical failures of some companies, to slowing sales of older treatments facing patent expirations and/or generic competition, and investor fears about Washington containing the rising cost of medicines—which resurfaced October 25 following industry resistance to President Donald Trump’s plan to cut Medicare Part B drug prices.
The past month’s Wall Street slump is also reflected in a year-over-year 8.8% decline in the total market capitalization of the 25 biotechs with the highest “market caps” as of October 30. That overall figure stood at $918.85 billion, compared with $1.007 trillion reported by GEN’s “Top 25 Biotech Companies of 2017”, which was also the same amount reported in 2016.
Total market cap of GEN’s top 25 companies has yo-yoed in recent years, having climbed to an all-time high of $1.225 trillion in GEN’s Top 25 Biotech Companies of 2015—published the very day Hillary Clinton touched off a biopharma stock sell-off by tweeting about her plan to prevent steep hikes in drug prices.
Below is a list of 25 biotech companies, ranked by their market cap as of October 30, 2018 as furnished by the exchanges on which they trade their shares, or by other publicly available sources.
The minimum market cap of GEN Top-25 biotech companies this time around is $9.4 billion, compared with $11.9 billion for last year’s 25th ranked company, which retained that same ranking this year.
Companies based outside the U.S. accounted for more than half (14) of the companies ranked on this year’s Top 25 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 headquartered in Ireland; and one each based in Australia, Belgium, Denmark, India, and Israel. One company on this list is headquartered in the U.S., but domiciled for tax purposes in the U.K. That leaves just 10 of the Top 25 biotechs that are domiciled in the U.S. in addition to maintaining key operations stateside.
Just missing the list at No. 26 is Jazz Pharmaceuticals, which had a market cap of $9.285 billion on October 30.
|25. Perrigo||$9.400 billion||NYSE (PRGO)|
|24. China Resources Pharmaceutical Group||$10.373 billion (CNY 72.272 billion)||Hong Kong Exchange (3320)|
|23. Yunnan Baiyao Group||$10.498 billion (CNY 73.138 billion)||Shenzhen Stock Exchange (000538)|
|22. WuXi AppTec||$12.473 billion (CNY 86.902 billion)||Shanghai Stock Exchange (603259)|
|21. Incyte||$12.603 billion||NASDAQ (INCY)|
|20. Sinopharm Group||$12.786 billion (HK$100.307 billion)||Hong Kong Exchange (1099)|
|19. UCB||$15.867 billion (€13.988 billion)||Euronext Brussels (UCB)|
|18. Mylan||$15.926 billion||NASDAQ (MYL)|
|17. BioMarin Pharmaceutical||$16.299 billion||NASDAQ (BMRN)|
|16. Sun Pharmaceutical Industries||$18.295 billion (INR 1.348 trillion)||National Stock Exchange of India (SUNPHARMA)|
|15. Teva Pharmaceutical Industries||$20.434 billion (NIS 75.877 billion)||Tel Aviv Stock Exchange (TEVA)|
|14. Samsung Biologics||$23.105 billion (KRW 26.334 trillion)||KRX Korea Exchange (207940)|
|13. Celltrion||$24.808 billion (KRW 28.277 trillion)||KRX Korea Exchange (068270)|
|12. Alexion Pharmaceuticals||$25.027 billion||NASDAQ (ALXN)|
|11. Jiangsu Hengrui Medicine||$30.851 billion (CNY 214.944 billion)||Shanghai Stock Exchange (600276)|
|10. Regeneron Pharmaceuticals||$36.718 billion||NASDAQ (REGN)|
|9. Vertex Pharmaceuticals||$43.274 billion||NASDAQ (VRTX)|
|8. Celgene||$50.147 billion||NASDAQ (CELG)|
|7. Shire||$52.781 billion (£41.559 billion) 1||London Stock Exchange (SHP) 1|
|6. Allergan||$58.995 billion||NYSE (AGN)|
|5. CSL||$60.270 billion (A$84.902 billion)||ASX (CSL)|
|4. Biogen||$61.479 billion||NASDAQ (BIIB)|
|3. Novo Nordisk||$81.397 billion (DKK 535.420 billion)||NASDAQ Copenhagen (NOVO)|
|2. Gilead Sciences||$92.379 billion||NASDAQ (GILD)|
|1. Amgen||$122.665 billion||NASDAQ (AMGN)|
1 Shire stock continues to be traded even though the company has agreed to be acquired by Takeda Pharmaceutical for £46 billion ($59.8 billion), in an acquisition expected to close in the first half of 2019.