Recent Performance Review Of 5 Large Cap Biotech Equities

by: Zvi Bar

Biotechnology, or biotech, is a type of applied biology that uses organisms and/or bioprocesses in engineering, technology, medicine and any other field that may require bioproducts. Biotechnology is also often used to describe genetic engineering and tissue culture technology.

Presently, the use of biotechnology is advancing healthcare are medicine, providing improvements to the human condition, greater understanding of genetics, including disease predisposition, and new categories of drugs that treat some of the most problematic medical conditions.

Doctors and researchers are finding promising uses for biotechnology, including drug production, pharmacogenomics, gene therapy and genetic testing/screening. Biotechnological innovations will only continue to revolutionize medicine as the human understanding of genetics advances.

Nonetheless, there are already numerous biotech innovations that have become widely used in medicine. While traditional big pharma companies such as Merck (MRK) and Pfizer (PFE) are developing many biotech innovations, there are also several biotech-focused companies that have become giants within the business.

There are now five large-cap (over $10 billion) biotech companies publicly traded in the United States: Alexion Pharmaceuticals (ALXN), Amgen (AMGN), Biogen (BIIB), Celgene (CELG) and Gilead Sciences (GILD). The following is a table of the 1-month, 3-month, 6-month and 2011-to-date equity performance rates for these biotech companies (click to enlarge):

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And below is a 2011-to-date comparison chart (click to enlarge):

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Of these listed biotech companies, Alexion and Biogen have appreciated the most within 2011, both increasing over 65 percent. Nonetheless, all five companies are positive for the year and have outperformed the broader market as defined by the DJIA and S&P 500. Alexion has appreciated over 558 percent over the last five years, which is by far the best performance of the group. Amgen is the only listed equity to have depreciated compared to five years ago.

These equities may provide investors with not only the opportunity to invest in a growing business, but also to support the research and development of new treatments that may help society.

Of course, there is no guarantee that these companies will continue to find new medical advancements, or that their competitors will not one day make their current innovations obsolete. Still, with every new development each of these biotech companies develops, there is an increasing likelihood that traditional pharmaceutical companies will acquire these companies, their treatments, patents and technology.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives.