Biotech Stocks Rise on Anticipation of New Drug Data (Update2)
8/31/00 1:35:00 PM
Source: Bloomberg News
Boston, Aug. 31 (Bloomberg) -- Amgen Inc. and other big biotechnology companies led industry stocks higher on investor anticipation of new drug information expected from medical conferences in the next few months.
Shares of Amgen rose 2.75 to 75.81 and have gained more than 7 percent in the past week. The Nasdaq Biotech Index has led the Nasdaq Composite Index for the last five days, with an 11 percent increase overall. The composite index rose about 4.9 percent in that period.
Investors eager to buy biotechnology shares ahead of the flurry of drug news have fueled the recent rally, which pushed several stocks to 52-week highs today. Companies are planning to release important drug data at conferences on infectious disease, cancer and other areas in the next few months.
''There will be lots of good data and news flow,'' said Caroline Copithorne, analyst at Morgan Stanley Dean Witter. ''People are looking to put their bets down before Labor Day.''
The Nasdaq Biotech Index of 198 stocks rose 46.72 to 1,362.95. Only 45 stocks in the index declined, while 139 rose and 14 were unchanged.
Millennium Pharmaceuticals Inc. rose 13.13 to 143.13 after it said it discovered an enzyme that could potentially become a new target for treating cardiovascular disease. Over the past week, the shares have gained about 15 percent.
Among the conferences where the new data will be presented are: the American Society for Microbiology's conference in Toronto, the meeting of the American College of Rheumatology meeting in Philadelphia and the American Heart Association's meeting in New Orleans. Most of the conferences are being held in late October and November.
''People realize this is the busiest season for meetings,'' said Michael King, an analyst at Robertson Stephens. Investors ''are just anticipating news.''
Immunex Corp., the Seattle-based maker of the popular rheumatoid arthritis drug Enbrel, is expected to release results of a study on use of Enbrel in patients with early stages of the disease, at a conference next month. Its stock rose 1.63 to 50.25, with a gain of 13 percent for the week.
Other biotechnology companies riding the rally include MedImmune Inc., which rose 4.19 to 84.13. Earlier, it touched a 52- week high of 84.75. Celgene Corp. rose 4.63 to 74. The shares earlier touched a 52-week high of 75.
Gilead Sciences Inc. rose 3.56 to 108 after earlier touching a 52-week high of 111.56. The company could release data on Tamiflu, a treatment for influenza that it developed with Roche Holding AG, at the Toronto microbiology conference next month, analysts said.
Noven Pharmaceuticals Inc. rose 5 to 42 after hitting a 52- week high of 42.13 earlier. The stock is up about 33 percent in the past week. Noven and Novartis AG won U.S. Food and Drug Administration approval earlier this month to market their estradiol estrogen patch for use in preventing osteoporosis.
Investor enthusiasm for Miami-based Noven is overdue, said Louis Webb, an analyst at Fahnestock & Co., which rates the company ''strong buy.'' Webb said Noven isn't actively followed by analysts as some other biotechnology firms.
About 224 biotechnology drugs are in late stages of clinical trials and many companies are waiting for product approvals from the FDA this year.
''There are data announcements, and particularly this year, (investors) are expecting an acceleration in product approvals later this year and into next year,'' Copithorne said.
Biotechnology stocks might begin to slide after Labor Day, said Stephen Flaks, manager of the Flaks Partners LP hedge fund, which invests in biotechnology stocks.
''You can't keep this up,'' Flaks said. ''Usually, the industry doesn't have a great October.'' |
