LEXG...getting streets attention
Upcoming Biotech IPOs Will Test Positive
By Nadine Wong
Biotech Stocks Columnist
08/17/2000 10:26 AM
Lately, there have been a number of biotech companies that are jumping into public waters attracting the attention of investors who plan to ride the wave, hoping to catch the big one.
I like to keep tabs on initial public offerings as an indicator on how well liked the sector is. And so far, the infatuation with this sector has not cooled off. This year, the number of IPOs entering the market has outpaced the past, and, at this rate, the number of biotech IPOs may hit a record.
The momentum players know that too, so expect the stocks to be volatile, as investors hoping for a short-term run jump in and out of these issues.
But for those of you who invest for the long term, you can find a few decent biotechs whose stocks have been in the market for six months or so. That's because the mandatory waiting period expires for those investors who were lucky enough to own shares prior to the IPO; share prices tend to drop as a result of profit taking. That's your opportunity to buy on the dips.
The pool of publicly traded biotech companies is definitely growing, so investors can afford to be picky when it comes to biotech companies.
So, which IPO looks like it may lead the pack?
There are several companies that have caught my eye. One is Lexicon Genetics (LEXG: Nasdaq) is using "knockout" mice (in which the targeted gene function has been "knocked out") for drug-candidate testing to produce thousands of strains of mutant mice. Each strain will contain one defective gene, which can then be easily singled out for study.
Lexicon is hoping that it can help accelerate genetic research and contribute to the formulation of new pharmaceutical preparations and treatments by offering strains that correspond to all 100,000 human genes. I like their technology and expect their approach will attract a lot of attention.
The company has been trading since April, and the company's share price is having its moments of up and down. The stock, which now trades at $28 1/2, has been as high as $49 1/4 and as low as $8. It came public at $22.
Then there is Regeneration (RTIX: Nasdaq), which is involved in the development of allografts (tissues harvested from cadavers and processed for use in living patients) for various surgical and therapeutic procedures. What caught my eye is that this company is rapidly growing and generating a profit.
The company came public on August 10 offering its shares at $14; they now trade at $10 1/4, having traded as high as $17. Keep an eye on it as a potential investment.
Nadine Wong is editor and publisher of the BioTech Sage Report, the leading biotech investment newsletter in the nation. Her weekly column looks at the hottest stocks in the biotech sector. |
