Drug stocks bouyed by good news, sector rotation
Friday September 11, 3:29 pm Eastern Time
NEW YORK, Sept 11 (Reuters) - Drug stocks were robust Friday due to good company-specific news and a desire to invest in defensive stocks, analysts said.
''Some of the drug companies have had very positive news,'' said
David Saks, an analyst with Gruntal & Co.
Merck and Co. Inc. (NYSE:MRK - news) Thursday released details of a drug its researchers have developed that may be effective in fighting depression.
''News about Merck's new drug was encouraging,'' said Maryann Quinn of BT Alex.
''It's still a way off,'' she said, referring to when the company could potentially bring the drug to market, ''but the news gave the stock a pop today.''
Merck shares were up 2-11/16 Friday to 126-1/2.
''I think the drug stocks have held up fairly well during all this turbulence,'' Quinn added. ''They are defensive, blue chip,'' she said.
Shares of Pfizer Inc. (NYSE:PFE - news), which got priority status last month for a review of a new arthritis pain reliever by the U.S. Food and Drug Administration, jumped 5-1/2 to 99-7/8.
The drug, Celebra, was co-developed with Monsanto Co. (NYSE:MTC - news), whose shares were up 7/8 to 57-1/8.
Boston Scientific Corp. (NYSE:BSX - news) also said it had completed the $2.1 billion acquisition of Schneider Worldwide from Pfizer.
Shares of Schering-Plough Corp. (NYSE:SGP - news) soared 4-3/4 to 95-1/4, while Eli Lilly and Co. (NYSE:LLY - news) stock rose 2-3/8 to 75-1/4.
Saks noted that the drug stocks were a beneficiary of sector rotation.
''When people are worried about the economy, they run to safe high ground,'' Saks said.
''Earnings will be driven by new drugs and there is a natural rotation to a safe haven when the market is preoccupied with the outlook for the economy,'' he said.
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