Public biopharmaceutical companies did manage to attract some investors off the sidelines in May with medical conference season getting into full gear. However, it was generally another lackluster month, with the Nasdaq Biotech index dropping 2% in the period in contrast to the broader markets with the Dow Jones Industrial Average growing by 2%. The sector, however, could get a significant boost in the next few days if the FDA gives the green light to Biogen Inc. and Eisai Co. Ltd.’s experimental Alzheimer’s disease therapy, aducanumab, a recombinant chimeric human IgG1 monoclonal antibody targeting beta-amyloid, that could be the first disease-modifying therapy for an indication that has seen no novel therapies approved in more than 15 years.
It has been a challenging opening first quarter for companies developing new therapeutics, with the BioWorld Drug Developers index recording a 9% drop in value, representing a stark contrast to its more than 35% growth last year.
The exceptional and speedy response in bringing safe and effective vaccines and therapeutics to combat COVID-19 has kept investors engaged and supportive. As a result, not only have companies involved in this research and development benefited, but so has the sector as a whole. Those biopharma companies have enjoyed significant jumps in their share values, with the BioWorld Drug Developers index closing up 4.6% in December and up 29% for 2020.
The BioWorld Drug Developers index is currently tracking up more than 9% in value so far this month and is on target, with a handful of trading days left before the end of the year, to close up over 35% for 2020, well ahead of the general markets.
Investors appear to be maintaining a bullish outlook on biopharma companies developing innovative medicines, with the BioWorld Drug Developers index currently tracking up over 5% in value so far this month heading into third-quarter earnings season.
Although investors’ enthusiasm has cooled toward the biopharma sector, particularly large cap companies, over the past couple of months, they haven’t neglected it entirely and have been willing to reward those companies reporting positive news about their pipeline progress. As a result, a number of companies returned significant gains in their share valuations in August, contributing to the BioWorld Drug Developers index pushing more than 4% higher in the period and up 6% year-to-date.
The share prices of blue-chip biopharmaceutical companies closed out the month on a high note to contribute to their stellar collective performance during the second quarter, with the BioWorld Biopharmaceutical index increasing almost 20%.
Blue chip public biopharmaceutical companies continued their positive trajectory in May, with the BioWorld Biopharmaceutical index recording an 8% jump in valuation and contributing to its year-to-date performance of approximately 17%.
After being hit with the major financial market meltdown when the COVID-19 outbreak decimated U.S. capital markets during March that saw the valuations of public biopharmaceutical companies developing new medicines plummet, it appears that they have put that reversal behind them with a dramatic price surge in April.
The financial markets were delivered a one-two punch March 9 – a plunge in oil prices along with fears that the coronavirus is continuing to spread unabated. As a result, the Dow Jones Industrial Average cratered 1,500 points in early trading after a brief halt with market circuit breakers kicking in. Biopharma equities did not escape the carnage, with the BioWorld Biopharmaceutical index trading down about 4% by market close, with the Dow closing down 7.8%.
