This explains today action, not the "BIG" picture. Maybe the continued rejection rate of drug by the FDA is the bigger weight around biotechs.
Biotechs Down -2: Small-Caps Hurt On FDA's Decisions
By ADAM L. FREEMAN
Of DOW JONES NEWSWIRES
NEW YORK -- Concern over another rejection of a new drug by the Food and Drug Administration drove down stocks of biotechnology companies on Monday, taking a particiular toll on small-caps.
The stocks slipped on the heels of news late Friday that the FDA rejected Pharmacia Corp.'s (PHA) painkiller Parecoxib - the latest in a string of FDA drug denials.
The Dow Jones Equity Index of Biotechnology Companies was recently down 2.4%, compared to the Dow Jones Industrial Average, which was down 0.06% and the Nasdaq Composite Index which was recently off 0.8%.
The Parecoxib "not approvable," came on the heels of news Tuesday that other large drug developers suffered a setback when the FDA asked for more information on the anti-asthma drug Xolair from the companies that developed it - Genentech Inc. (DNA), Tanox Inc. (TNOX) and Novartis AG (NVS). The FDA's action means that the drug will not be approved during 2001, the companies said.
The biggest sector losers Monday were mostly small-cap concerns, which many analysts believe are vulnerable to bad news coming out from larger companies. OSI Pharmaceuticals Inc. (OSIP) was recently trading down 9%, Curagen Corp. (CRGN) recently off 7%, Regeneron Pharmaceuticals (REGN) slumping 6%, and Genzyme Transgenics Corp. (GZTC), down more than 5%.
Jim |
