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) - Get Report:

BLUE data by YCharts

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

RNA data by YCharts

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Enanta Pharma (ENTA) - Get Report has help up well:

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ENTA data by YCharts

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And so has Portola Pharma (PTLA) - Get Report:

PTLA data by YCharts

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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.

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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;

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