Biotech stocks close the third quarter on a volatile note - Report

After advancing steadily during the preceding quarters, biotech stocks gave up some of those gains in the third quarter Volatile stock markets and fears of sector-wide drug pricing regulations led to a major correction in biotech stocks during the third quarter. The Nasdaq Biotech Index fell 17.9% in USD. BB Biotech shares ended the quarter with a decline of 10.1% in USD, which was clearly better than the index performance. Lower stock prices created attractive entry points and BB Biotech took advantage of them by investing 290 million Swiss francs ($303.6 million) in existing shareholdings as well as two portfolio additions, Esperion and Prothena. Amid the stock market volatility, companies in BB Biotech's portfolio continued to launch new products and they also released positive clinical trial results. Looking ahead, further regulatory approvals can be expected. Companies awaiting approval announcements include Actelion (treatment of pulmonary arterial hypertension), Alexion (lysosomal acid lipase deficiency) and Gilead (HIV therapy).

The third quarter proved to be difficult for the global equity markets. With the emerging equity market correction continuing well into the third quarter and the US Federal Reserve bank once more pushing out its rate increase decision, global market indices lost ground and turned negative for the year. The MSCI World Equity Index lost in US dollar 8.3% in this period, the S&P 500 corrected by 6.4% in US dollar, the SMI 2.9% in Swiss francs and the DAX 11.7% in euro. Since the beginning of the year, key equity benchmarks all lost value, such as the MSCI World Equity Index down Us dollar 5.6%, the S&P 500 down 5.3% in US dollar, the SMI down 2.4% in Swiss francs and the DAX down 1.5% in euro.