Lackluster first quarter for biotech stocks

Concerns about capital market resilience clearly had an impact on investor preferences during the first quarter. After a strong start to the year, market sentiment switched to risk-off and this triggered heavy selling in the small- and mid-cap segments. Portfolio investment flows in the biotech sector – an important indicator – remained negative. Smaller biotech companies underperformed relative to their larger peers. In contrast to the sector performance, many biotech companies reported positive R&D and regulatory news.