Biotechnology stocks had a rough start to the year. Although there was an overall market slump, biotech stocks nonetheless had a much rougher ride, and the sector still hasn’t quite recovered.
The Nasdaq biotechnology index is down over 22% year-to-date. In comparison, the Standard & Poor’s 500 Index, a measure of overall market performance, is down by only 1% for the year.
However, there are a handful of biotech companies that have managed to buck the trend. They’ve posted positive returns—with true breakthroughs. Here’s a look at the top five and how they’ve wooed investors.
5. Takara
Total returns, year-to-date*: 5.4%
Takara Bio has been around for over 90 years. The Japanese company may be best known as a fermentation and beverage company in its home country, but its secret weapon is its biotechnology arm,Clontech located in Mountain View, Calif. Takara acquired Clontech in 2005, giving the company expertise in gene discovery, regulation, and function. Clontech’s recent discoveries, including a powerful new delivery technology for CRISPR gene editing and a highly sensitive T-Cell Receptor analysis kit to help develop better immunotherapy medicines, helped boost company shares.
*Total returns includes dividends and share buybacks. All numbers are Bloomberg data, calculated in U.S. Dollars.
4. Intrexon
Total returns, year-to-date: 16.1%
Intrexon (XON) uses its “Better DNA” technology platform to genetically modify everything from mosquitos to microscopic microbes or apples. The Germantown, Maryland-based company is run by self-made billionaire Randal Kirk. While the stock has fallen sharply from mid-2015 highs, it’s been making a steady comeback this year. That is in part due to a unit of Intrexon called Oxitec, which has developed a type of genetically-modified mosquito that can kill off entire populations of the disease-ridden bug. This has already been tested in areas of Brazil where Zika has run rampant, helping decrease Aedes aegypti mosquito populations by up to 90%.
3. Celltrion
Total returns, year-to-date: 23.3%
South Korea-based Celltrion is a global biopharmaceutical company that develops a range of medicines using advanced DNA and molecular biology technology. Its corporate slogan—”advanced therapeutics within everyone’s reach”—is an apt summary for its work creating biosimilars, some of which are in partnership with larger pharmaceutical partners like Novartis (NVSEF). Celltrion’s stock boomed at the start of this year and has sustained that growth after the U.S. Food and Drug Administration declared its biosimilar, a copy of Johnson & Johnson’s best-selling arthritis treatment Remicade, equal “in terms of safety, purity, and potency” to the brand-name biologic. The biosimilar, called Remsima, is already sold in Europe.
2. Affymetrix
Total returns, year-to-date: 38.6%
Affymetrix (AFFX) is a pioneer in microarray technology, which can study the expression of many genes at once using a gene chip. The Santa Barbara-based company offers a range of genomic analysis products that are used to identify underlying disease mechanisms, identifying biomarkers for personalized medicine, and creating diagnostic tests. The biotech’s stock skyrocketed shortly after news broke in early January that Thermo Fisher Scientific (TMO) agreed to acquire the company for $1.3 billion, a premium of about 52%. The acquisition is expected to be finalized by the end of June.
1. PeptiDream
Total returns, year-to-date: 39.1%
Tokyo-based PeptiDream has a proprietary peptide discovery platform system (PDPS) that’s able to relatively quickly generate peptide libraries and select certain versions to use in testing. This is important because new research suggests that peptides, which are short chains of amino acids, could be used to treat some cancers by inhibiting cancer growth. PeptiDream’s stock was hit by the biotech slump but bounced back big as of mid-February, helped by news of a technology license agreement struck with Eli Lilly (LLY) that includes annual payments and royalties on future sales of drugs that use its technologies. It has similar agreements with Bristol-Myers-Squibb (BMS) and Novartis (NVS).
