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Did Someone Say Blue Chip?

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By Meredith Salisbury

 

Nasdaq’s delisting warning notice has become so common among genomics companies that it was a refreshing change to see the news that GTI member Lion Bioscience was actually being added to a new index.

The TecDAX was slated to launch on March 24, and included 30 of the “technology blue chips,” as Lion put it, on Frankfurt’s stock exchange. Anyone in the industry can be excused for wondering: How did a bioinformatics firm become blue-chip?

Sure, Lion’s trading around $4, down some 96 percent from its heady high of $106.5 in September 2000. But compared to so many of the industry’s pseudo-penny-stock companies, Lion’s performance is actually among the strongest. It spent most of the second half of last year at well below $4, but has since kept its price more consistently around $5.

It helps that the TecDAX is a small German index, where companies like Lion have a better chance to compete. Inclusion is based on market cap and trade volume as a percent of outstanding shares, says Lion CEO Friedrich von Bohlen, adding that Lion ranked about 20th in both categories. (The index will be re-ranked semiannually and, just like on the bigger indices, a share price below €1 could get you axed, says von Bohlen.)

Lion’s not the only genomics-related company to make it on the index. Fellow GTI member Qiagen is on board, as are GPC Biotech with its gene expression platform; biopharmaceutical company Medigene; and Evotec OAI, a biological screening firm.

Von Bohlen says that being on the index is indeed “giving hope” to the sector. “Everyone was slashed down, but biotech could still preserve some value — more than the dotcoms,” he adds.

More importantly for his company, though, is the publicity that comes from simply being on the index. With analyst layoffs, von Bohlen says, the real struggle these days is getting coverage. If you’re in the index, you get it. “If you are out, you’re as good as uncovered,” he says.

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