Biotech Meltdown: Numbers Don’t Mean Much Until We See New Product Growth

We are almost through the earnings season and despite good results most biotech stocks tanked again yesterday. The reason you know well by now-expectations for earnings and top line growth have been taken down because price increases are not likely for 2017. Another grim scenario might be regulatory action to have the State and Federal Government negotiate prescription drug prices for Medicare, Medicaid and other Federal programs. So with this as constant backdrop investor sentiment has really turned against the biopharmaceutical and drug industry.

The large cap IBB is down 24% YTD and 11.3% over the past month.

The more speculative equal weighted XBI is down 20% YTD and 15.3% over the past month.

The Healthcare SPDR (XLV) is down 6.5% YTD and 6.6% for October.

Here are nine top-tier biopharma stocks and how they performed over the past week, over the past 30 days and YTD:

Surveying the Damage

                    Company Ticker Price Market Price               1/7/2016 Cap $B 10/3/16 10/31/16 % Perf PE %YTD         8/11/2016             Abbvie ABBV 57.21 108.5 62.3 55.9 -11.4 15 -5.55   Alexion ALXN 174.37 29.73 121.17 130 6 79.9 -31.7   Amgen AMGN 158 129.2 165.2 142.3 -14.74 14.2 -12.5   Biogen BIIB 284.01 71 310.5 280 -10.35 15.9 -8.25   Bristol Myers BMY 65.27 101.2 54.31 51 -5.32 25.43 -25.7   Celgene CELG 111.89 87.3 103.22 102.5 -1.88 38.9 -14.2   Gilead Sci* GILD 96.25 104.8 77.6 73.6 -6.98 6.48 -27.2   Regeneron REGN 501.96 43.8 402 345.8 -14 54 -36.5   Vertex VRTX 115  25 85.3 76.5 -12.3 n/a -39.2