In a year that propelled the stock market to record highs, shares in nearly a dozen San Diego companies more than doubled in price, driven by new product discoveries, rebounding consumer activity and several major mergers and acquisitions.
Among the top 45 local companies -- based on current stock prices -- 11 had price hikes of more than 100 percent, 10 rose more than 50 percent and 12 rose more than 10 percent. Only eight of the companies declined in price.
"It was a pretty good year, particularly for biotechs," said Bud Leedom, founder of San Diego's California Equity Research. "This kind of a year happens once every 10 years or so, when financing windows open up, products get approved, companies go public and the stock prices rise. There were a good handful of companies that did really well during the year."
Partly because the Food and Drug Administration has sped up the approval process for new drugs and technologies, Leedom predicted that there would be more of the same kind of price rises next year, although probably not quite as strong.
Some of the price rises were due to merger activity, as large companies from outside San Diego offered to buy local firms at premium prices. Impending mergers slated to close in the next few months include Leap Wireless (Nasdaq: LEAP) and AT&T (NYSE: T); Life Technologies (Nasdaq: LIFE) and Thermo Fisher Scientific (NYSE: TMO); and Santarus (Nasdaq: SNTS) and Salix Pharmaceuticals (Nasdaq: SLXP).
Leedom said that as an investor, he was particularly glad to see the Santarus purchase. But he added that "it's kind of a shame" to see the buyouts, since San Diego needs more firms headquartered here rather than being mere subsidiaries -- at best -- of firms from outside the area.
Besides the triple-digit price jumps at Leap and Santarus, the local companies that saw the greatest stock growth in 2013 included:
Acadia Pharmaceuticals (Nasdaq: ACAD), which skyrocketed 417 percent largely because of pimavanserin, its proposed treatment for a form of psychosis tied to Parkinson's disease. The drug is in the final stage of studies required before filing a new drug application with the Food and Drug Administration, which is expected to be filed late next year. In the meantime, the company is studying whether the drug can be used to combat schizophrenia as well as psychosis related to Alzheimer's disease.
Isis Pharmaceuticals (Nasdaq: ISIS), which rose 283 percent as the company reaped the benefits from its partnerships with such biotech giants as GlaxoSmithKline (NYSE: GSK) to treat rare and infectious diseases; Roche for a Huntington's disease treatment; AstraZeneca (NYSE: AZN) for cancer research and Biogen Idec (Nasdaq: BIIB), on four separate projects that could which have begun generating millions of dollars in milestone payments. Isis' Kynamro, a cholestoral treatment, was approved by the FDA in January, and the company now has 31 products in various stages in the pipeline, with plans to add three to five more each year. "We get some incredible accomplishments for a company that has less than 400 employees," spokesman Wade Walke told the Oppenheimer Healthcare Conference early this month.
Bank of Internet (Nasdaq: BOFI) rose 198 percent as the online bank grew dramatically.Over the past two years, BofI's checking account balances grew by 554 percent, with 140 percent growth in money market balances.
Greg Garrabants, the bank's CEO, told investors this month that his goal "is to increase our share of transaction accounts and develop deeper customer relationships." But Matt Koppenheffer, banking and financial services bureau chief at the Motley Fool, said he worries a little bit when he sees certain financial services companies, particularly insurers and banks, growing very fast. "It can be done, and it can be done right, but it gets more difficult because it's a risk management business," he said.
Other companies in the top 10 were mostly in the pharmaceutical or biotech industries, with one fast-food exception: Senomyx (Nasdaq: SNMX), 170 percent; Ligand (Nasdaq: LGND), 163 percent; DexCom (Nasdaq: DXCM), 151 percent; Halozyme (Nasdaq: HALO), 130 percent; Nuvasive (Nasdaq: NUVA),, 110 percent; Illumina (Nasdaq: ILMN), 89 percent and Jack in the Box (Nasdaq: JACK), 73 percent.
At the bottom of the list was Infinity Pharmaceuticals (Nasdaq: INFI), whose stock price dropped 66 percent during the year due to the failure of its lung cancer treatment retaspimycin, despite a number of positive results for its proposed lymphoma treatment IPI-145.
The only other firms among the top 45 that lost ground during the year were Sequenom (Nasdaq: SQNM); Arena Pharmaceuticals (Nasdaq: ARNA); Entropic Communications (Nasdaq: ENTR); Maxwell Technologies (Nasdaq: MXWL); BioMed Realty (NYSE: BMR); and Realty Income (NYSE: O).
Leedom said that real estate investment trusts like BioMed and Realty Income had a good run over the past several years, but with interest rates rising, investors are backing away from them. "Anytime there's a potential for higher interest rates – even if the raises are minute – it's not good for that sector," Leedom said.