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A Chart You Should See: Biotech IPO Class of 2013 Is Lagging

Stocks in this article: RNA ENTA PTLA BLUE

 



The red-hot biotech IPO class of 2013 is cooling off. 

Look at the blue line in the chart above. It represents the performance of all biotech IPOs in 2013. For most of the year, biotech IPOs were en fuego. Since October, not so much. And now, that blue line has crossed below the red line, which represents the  S&P 500. 

The biotech IPO Class of 2013 is now under-performing the broader market. (Thanks Credit Suisse for the chart.)

For all the buzz that newly public biotech companies generated this year, it was always unrealistic to believe shares would go up forever. This is particularly true for the biotech stocks with very early-stage pipelines. 

Like Bluebird (BLUE):

BLUE Chart
BLUE data by YCharts

Prosensa  (RNA) debuted well but then its lead drug blew up:


RNA Chart
RNA data by YCharts

Enanta Pharma (ENTA) has help up well:


ENTA Chart
ENTA data by YCharts

And so has Portola Pharma (PTLA):


PTLA Chart
PTLA data by YCharts

The expiraton of lock-up agreements play a significant role in the performance of IPOs, and biotechs are no exception:

Credit Suisse:

So far 11 of the 38 Class of 2013 IPO companies have had their lockup dates expire. The average pre lock-up performance for the 11 companies is +57% (+48%/+30% relative to S&P500/S&P500 Biotech, respectively), while the average post lockup performance is -11% (-15%/-16% relative to S&P500/S&P500 Biotech, respectively.)

-- Reported by Adam Feuerstein in Boston.

Follow Adam Feuerstein on Twitter.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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