The general markets headed south on the last day of the month with the Dow Jones Industrial Average dropping more than 300 points in value Thursday, which served to drag biotech's blue chip biotech companies with it. The drop wiped out all the Dow's gains for the year.

In the wake of that market selloff, biotech's values also hit the skids. By the close of markets Thursday, most of the big biotech companies posted red figures for the day, but it was not enough to completely spoil a strong July performance of the BioWorld Blue Chip Biotech Index, a price-weighted index that includes 20 of the top biotech companies by market cap. (See BioWorld Blue Chip Index, below)

For July, the index was up just over 3 percent compared to a 0.9 percent decline in the Nasdaq Composite Index over the same period, and the Dow Jones Industrial average slipped 1.5 percent. Year to date, the index still remains up almost 14 percent compared to the Dow, which is underwater, down about 0.9 percent, and the Nasdaq Composite, up at 4.6 percent.

Helping support the positive performance of the Blue Chip index was Amgen Inc. and Gilead Sciences Inc., which saw their share values jump 7.6 percent and 10.4 percent, respectively, in July.

Amgen, the industry's second largest biotech company by market cap, which is nearing $100 billion, not only provided exceptionally strong second quarter financial results but also revealed its plans for significant corporate changes. The Thousand Oaks, Calif.-based company said it will shed approximately 12 percent to 15 percent of its global work force. That equates to a reduction of about 2,400 to 2,900 employees who are predominantly based in the U.S. (See BioWorld Today, July 31, 2014.)

Gilead's shares were buoyed by strong second quarter financials. It reported that Sovaldi (sofosbuvir) sales hit nearly $3.5 billion in the reporting period, blowing past analyst forecasts of about $2.6 billion for the quarter and accounting for more than half its total antiviral sales. (See BioWorld Today, July 24, 2014.)

Doctors prescribed the hepatitis C therapy to more than 80,000 patients in the U.S. and Europe just months after the drug's December 2013 launch, raising its sales record since launch to about $5.8 billion, leading Gilead to raise its full-year net sales guidance to between $21 billion and $23 billion from an earlier $11.5 billion estimate.

Gilead said its net profit rose to about $3.66 billion, or $2.20 per share, from $772.6 million, or 46 cents per share, a year ago.

The BioWorld Biotech Growth Index, which includes companies with market caps in the range of $1 billion to $3 billion and a résumé that typically includes a strong drug pipeline and partnered products in late-stage clinical trials, took it on the chin again with its value tumbling just over 14 percent in July; it is now down by more than 9 percent year to date. (See BioWorld Biotech Growth Index, below.)

The smaller emerging biotech companies typically suffer from general investor nervousness and that was born out in the 11 percent drop in the value of the BioWorld Emerging Biotech Index in July. Despite this set back the index remains up by approximately 8 percent year to date. (See BioWorld Emerging Biotech Index, below.)

It appears that the strong second quarter results being reported by big biotech companies currently will help support values in the sector. Reception to a raft of biotech initial public offerings in July has been mixed but as we are not seeing many potential offerings being pulled, the signs are good that the industry is strong enough to ride out some predicted turbulence in the general markets.