Investors navigated cramped hotel hallways and hustled between company presentations on the opening day of the J.P. Morgan Healthcare Conference on Monday while staring incredulously at their smartphones. Biotech stocks large and small were plummeting, and the painful start to 2016 was turning torturous.
The largest and most important healthcare conference held in San Francisco at this time each year is supposed to generate news and excitement to get investors in the mood to buy biotech stocks. But this year, there were very few market-moving announcements.
Shire(SHPG) - Get Report finally clinched its $32 billion acquisition of Baxalta (BXLT) , but the deal had been discussed for months and was therefore widely expected by investors. No other significant biotech M&A deals were announced Monday.
Celgene(CELG) - Get Report offered 2016 revenue and earnings guidance at the conference, but it was largely in line with current consensus expectations, so investors shrugged. None of the other large-cap biotech companies provided guidance Monday.
Vertex Pharmaceuticals(VRTX) - Get Report offered a limited and conservative sales outlook for one of its cystic fibrosis drugs, Kalydeco, while holding off on providing guidance on a second, more important drug, Orkambi.
Nearly every other company deciding to disclose 2016 sales guidance Monday told investors what they already knew. Almost across the board, company guidance was "in line" with consensus expectations.
A dull start to the J.P Morgan Healthcare conference contributed to a bad day for biotech stocks. The SPDR S&P Biotech ETF(XBI) - Get Report fell 6% Monday to 57.08, a level it had not visited since November 2014. In the early afternoon Monday, the XBI was down more than 8%.
The XBI, the ETF with the broadest portfolio of biotech stocks, has now lost more than 18% to start 2016.
Among large cap biotech stocks, Celgene closed down 5%. Vertex lost 6% and Alexion Pharmaceuticals(ALXN) - Get Report fell 3%. Gilead Sciences(GILD) - Get Report managed to close flat, which should be considered a major victory.
Bad news announced Monday was punished severely. Genvec (GNVC) fell 61% because enrollment for clinical trial of a gene therapy for hearing loss was stopped for a patient safety check.
Bluebird Bio(BLUE) - Get Report dropped 18% after the company said it would wait until next December to present updated results on its gene therapy clinical trials in beta-thalassemia and sickle cell disease.
"Biotech stocks were on sale today," a healthcare investor remarked to me while waiting for a company presentation to begin. "The scarier thing is that prices could be marked down even lower in the coming days."
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.