=DJ Biotechs Down -2: 'Slightest' Momentum Moving Investors
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29 Mar 16:09
By Beth M. Mantz
NEW YORK (Dow Jones)--Biotech investors were spooked again.
The "slightest" momentum upward or downward affects investors' staying power,
according to Daniel Kopp, an analyst at Madison Securities. Recently, this
momentum has led to a biotechnology-wide and Nasdaq-wide selloff.
This time, much of the blame is being attributed to Goldman Sachs' Abby Joseph
Cohen, who reduced the recommended exposure to the stock market in the firm's
allocation model Tuesday. Uncertainty arising from litigation such as the Amgen
Inc. (AMGN)-Transkaryotic Therpaies Inc. (TKTX) case, or clinical trial results
are sufficient to set off downspells too, analysts said.
A good portion of the investors know the cycles for biotech companies and know
when they are investing in profitable companies. But many of the momentum
players have grabbed and dumped stocks on the mere whim that these companies are
engaged in the biotechnology business, irrespective of the scientific field,
product potential and financial support.
The current exodus is "indiscriminate and broad-based," said Mark Augustine,
an analyst at U.S. Bancorp Piper Jaffray.
But if investors have done their homework, these drops shouldn't have too
strong of an impact because this selling will weed out those momentum players,
said Kopp.
The AMEX Biotechnology Index recently fell 28.43, or 5.17%, to 521.18.
Big movers include Medarex Inc. (MEDX), off 30.3% to 42 1/2. Abgenix Inc.
(ABGX) fell 13.7% to 159 7/16, and Alexion Pharmaceuticals Inc. (ALXN) was down
17.7% to 69 7/8.
-Beth M. Mantz; Dow Jones Newswires; 201-938-5287
(END) DOW JONES NEWS 03-29-00
04:09 PM |
