Generics still doing well amongst small-caps in first half

Of the large caps, generic firms were undoubtedly flavour of the first half, EP Vantage reported earlier this week (Generic players continue to impress in the first half, July 1, 2009). An analysis of the biggest gainers and fallers amongst the minnows of the sector reveals, unsurprisingly, a stock pickers’ paradise.

Still, smaller generic companies are notable by their presence, with India’s Biocon, Aurobindo Pharma and Matrix Laboratories all making the grade, although the latter did receive a bid approach from Mylan. Other substantial gainers are not hard to guess, most notably Dendreon following the high-profile success of its prostate cancer vaccine in a pivotal trial. At the other end of the scale tales of clinical set backs pervade, with ViroPharma one of the most substantial decliners, following the failure of its biggest pipeline hope, maribavir for cytomegalovirus, back in February.

Small-cap analysis

Small cap ($250m-$2.5bn) pharma companies: top risers and fallers in H1 2009
Share price (local currency) Market capitalisation ($m)
Rank Top 5 Risers 31-Dec-08 30-Jun-09 % change YE 2008 2009 (latest) EP Vantage comment and analysis
 1   Dendreon ($)  4.58  25.00  446%  438  2,853 The Dendreon rollercoaster continues
 2   MannKind ($)  3.43  8.31  142%  350  848 Mannkind CEO predicts deal for inhaled insulin product by September
 3   Savient Pharmaceuticals ($)  5.79  13.83  139%  316  841 Savient’s gout drug faces final hurdle backed by strong endorsement
 4   Matrix Laboratories (Rs)  91.10  207.20  127%  282  641 EventAnalyzer: Daily Market Movers
 5   Biocon (Rs)  116.55  219.00  88%  466  876 Biocon signs latest in string of biosimilar deals
Top 5 Fallers
 1   ViroPharma ($)  13.02  5.93  (54%)  910  459 ViroPharma's maribavir disappointment will sharpen focus
 2   Progenics Pharmaceuticals ($)  10.31  5.15  (50%)  316  160 Progenics needs the tide to turn on Relistor
 3   Questcor Pharmaceuticals ($)  9.31  5.00  (46%)  614  322 EventAnalyzer: Daily Market Movers
 4   GTx ($)  16.84  9.23  (45%)  613  336 EventAnalyzer: Daily Market Movers
 5   Emergent BioSolutions ($)  26.11  14.33  (45%)  788  434 Emergent shareholders lose faith on contract delay

Micro-cap analysis

Micro cap ($100m-$250m) pharma companies: top risers and fallers in H1 2009
Share price (local currency) Market capitalisation ($m)
Rank Top 5 Risers 31-Dec-08 30-Jun-09 % change YE 2008 2009 (latest) EP Vantage comment and analysis
 1   Aurobindo Pharma (Rs)  167.80  465.50  177%  181  501 EventAnalyzer: Weekly Market Movers
 2   SIGA Technologies ($)  3.27  8.44  158%  116  306 EventAnalyzer: Weekly Market Movers
 3   Protalix BioTherapeutics ($)  1.84  4.52  146%  139  344 EventAnalyzer: Weekly Market Movers
 4   ImmunoGen ($)  4.29  8.62  101%  241  484 EventAnalyzer: Daily Market Movers
 5   Pharmaxis (AUS$)  1.21  2.41  99%  188  375 EventAnalyzer: Weekly Market Movers
Top 5 Fallers
 1   Synta Pharmaceuticals ($)  6.12  2.33  (62%)  208  79 Glaxo’s decision leaves Synta with few options
 2   Cytos Biotechnology (SFr)  25.00  12.60  (50%)  115  58 Cytos rattles nerves with disappointing hypertension data
 3   Caraco Pharmaceutical Laboratories ($)  5.92  3.07  (48%)  222  115 EventAnalyzer: Daily Market Movers
 4   Akorn ($)  2.30  1.21  (47%)  207  109 EventAnalyzer: Weekly Market Movers 
 5   Dyax ($)  3.64  2.14  (41%)  229  153 Dyax HAE rebuff disappointing but not a huge surprise

Nano-cap analysis

One company that is missing from the analysis but certainly deserves mentioning is Vanda Pharmaceuticals. With a market cap of only $14m at the beginning of the year, the company was too small to make it into even the nano-cap category, which has a floor of $25m. However, following the unexpected approval of schizophrenia drug Fanapt in May, the group now has a healthy market value of $317m (Vanda shares rocket after surprise Fanapt approval May 7, 2009).

This represents a huge 2,276% gain, which looks certain to guarantee Vanda the crown of best performing stock this year, an accolade that Dendreon probably thought it had in the bag.

The approval of Fanapt also benefitted another company, Titan Pharmaceuticals, which was even smaller than Vanda at the beginning of the year, with a market value of $2.9m. Titan's shares have gained a whopping 2,020% in the first half.

Nano cap ($25m-$100m) pharma companies: top risers and fallers in H1 2009
Share price (local currency) Market capitalisation ($m)
Rank Top 5 Risers 31-Dec-08 30-Jun-09 % change YE 2008 2009 (latest) EP Vantage comment and analysis
 1   OncoGenex Pharmaceuticals ($)  3.00  21.88  629%  33  121 ASCO EventAnalyzer - 2009's winners and losers
 2   Hemispherx Biopharma ($)  0.36  2.54  606%  28  281 Event - Hemispherx shares liven up ahead of chronic fatigue drug PDUFA date
 3   AVANIR Pharmaceuticals ($)  0.41  2.22  441%  32  174
 4   Spectrum Pharmaceuticals ($)  1.49  7.65  413%  48  296 EventAnalyzer: Daily Market Movers
 5   Algeta (NOK)  7.90  37.30  372%  47  220 Algeta releases pressure as it raises $35m
Top 5 Fallers
 1   Neuropharm (£)  1.14  0.24  (79%)  53  11 EventAnalyzer: Daily Market Movers
 2   La Jolla Pharmaceutical ($)  0.58  0.19  (67%)  32  13 La Jolla drug failure leaves few options
 3   Catalyst Pharmaceutical Partners ($)  1.80  0.65  (64%)  25  9
 4   Cortex Pharmaceuticals ($)  0.57  0.24  (58%)  27  12
 5   Immunosyn ($)  0.18  0.08  (58%)  49  20 Financial woes could deflate Immunosyn

The fact that this analysis looks very different from the first-quarter tables illustrates how quickly things can change for these small drug developers (InterMune tops small cap gainers in first quarter of 2009 April 2, 2009). Whilst several of the worst performing stocks have failed to recover and remain in the doldrums, few of the biggest gainers have maintained their positions. The exceptions include SIGA Technologies and ImmunoGen amongst the micro caps.

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