Prices strong, hoopla gone Tuesday, Aug. 29, 2000 08:13 PDT
By Paul Schneider, America-iNvest.com
america-invest.com
As late summer rolls lazily along toward Labor Day weekend, things are pleasantly dull in biotech.
Pleasant because prices for biotech shares, as measured by the Nasdaq Biotechnology Index ($IXBT) through the close of trading Monday, Aug. 28, are up a whopping 48% for the calendar year.
Compare that with the Dow Jones Industrial Average, down 2.1% since the close of trading Dec. 31, 1999; the Standard and Poor's 500 Index, up 3% year-to-date; and the Nasdaq composite index, unchanged for the year.
Clearly, biotech has been the place to be in the year 2000.
Things are also pleasant in biotech because the big caps have performed this year, providing profits to investors in addition to the safety of their size.
Compared to their closing prices on Dec. 31, 1999, most of biotech's big issues have increased in price. This group includes the few biotechs with market capitalizations exceeding $10 billion -- Amgen (AMGN), Genentech (DNA), Immunex (IMNX) and MedImmune (MEDI).
It also includes many biotechs with market caps between $1 billion and $10 billion -- Chiron (CHIR), Human Genome Sciences (HGSI), Millennium Pharmaceuticals (MLNM), Genzyme General (GENZ), Protein Design Labs (PDLI), Sepracor (SEPR), Abgenix (ABGX), Gilead Sciences (GILD), Celgene (CELG), Cephalon (CEPH) and Medarex (MEDX).
NIH lifts ban on federal funding for stem-cell research
Late August brought very pleasant news for companies working in stem-cell research. The National Institutes of Health released guidelines that lifted the ban on federal funding of research in that area.
Stem cells are early-stage human cells capable of developing into many different types of specialized cells, such as neurons, bone or heart tissue. Researchers envision that someday such cells will be delivered directly to diseased human tissue to treat or cure ailments including Parkinson's disease and spinal cord injuries.
The NIH move boosted Aastrom Biosciences (ASTM), StemCells (STEM) and Geron (GERN).
Relatively quiet in late August
Newswise otherwise, the sector has been dull in late August, but only in a relative sense. Things have been pretty quiet the past week or so compared to the rest of summer.
There was Celera's big announcement about reaching a genome research milestone in June, then a run of mostly positive earnings reports in July that helped affirm the sector's strength and propel the mid-year rally.
In July and earlier this month, biotech IPOs were coming fast and furious, and mostly welcomed by the market, which has driven up biotech prices the past two years.
And the waning days of summer will yield to fall's conference season, where biotechs of all sizes will unleash a spate of research news.
Clear those arteries
A pair of biotech small caps are talking loud about their treatments for restenosis, a persistent problem in the world of angioplasty. According to the American Heart Association, nearly one-third of patients who undergo angioplasty experience restenosis, or the re-closing of arteries, within six months of the procedure.
Angioplasty is a procedure in which a catheter equipped with a tiny balloon at the tip is inserted into an artery that has been narrowed by the accumulation of fatty deposits. The balloon is then inflated to clear the blockage and widen the artery. Hundreds of thousands of angioplasties are performed each year in the United States.
One of the small biotechs, Theragenics Corp. (TGX), has reported successful results in pre-clinical studies using its palladium 103 (Pd-103) treatment to inhibit restenosis in pig coronary arteries following balloon angioplasty. Pd-103, at one month follow-up, was shown to inhibit the scarring that leads to re-closing of the arteries, according to Christine Jacobs, president and CEO of Theragenics, an Atlanta-based medical isotope and cancer treatment company. Based on what was learned in the initial study, Theragenics is proceeding with longer-term animal studies, Jacobs added.
Its shares closed Monday, Aug. 28, at $7.42 after a gain of 52 cents for the session. The company's second-quarter results were flat. Revenue for the period increased 4% to $11.5 million, compared with $11.1 million for the same period last year. Net income was $4.1 million, or 14 cents per diluted share, the same as a year ago.
Not to be upstaged by Theragenics, Radiance Medical Systems (RADX) recently showcased its low-dose radiation RDX System in a demonstration for more than 20,000 cardiologists attending the 22nd Congress of the European Society of Cardiology held in Amsterdam. Studies have shown that a low dose of radiation at the point of obstruction significantly reduces the rate of restenosis.
Shares of Radiance, headquartered in Irvine, Calif., closed Monday, Aug. 28, up 13 cents to $15.13.
Its numbers are moving the right way. For the second quarter, ended June 30, the company reported a net loss of $1.17 million, or 10 cents per share, compared with a second-quarter 1999 loss of $2.01 million, or 18 cents per share. The company said the decrease in net loss for the second quarter was due primarily to the increase in license fees, offset by higher spending for clinical trials and research and development projects. |
