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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (4548)	8/27/2001 3:11:19 PM
From: Biomaven	Respond to of 52153

Some interesting results today from my mathematical analysis of biotech and pharma stock price moves. An analysis of the past month or so of hourly moves, compared with the same analysis done some two months ago, shows a marked difference. The difference seems to lie in the interaction among the biotechs, the pharmas and the broader markets. Two months ago the drug stocks were quite separate from the biotechs and broader markets. Now the biotechs are separated from the others, and the DRG and INDU are pretty similar. More technically, I am comparing a scatter graph of the first two principal components of a singular value decomposition of the stock price moves of about 100 biotechs and pharma stocks. The first principal component emerges basically as the BTK index, while the second one emerges basically as the DRG index. On this scatter graph two months ago the BTK was pretty close to the COMPX and SPX. Now all of the INDU, COMPX, RUTX and SPX have moved much further away from the BTK and towards the drugs. Some other observations: HGSI is curently the "paradigmatic" biotech stock on this graph. MEDX, ABGX, MLNM and PDLI are also very close. (This isn't a lot different than two months ago, although then ABGX was the closest). Treasury bonds (not rates) seem to be moving inversely to biotechs, although the relationship is not strong. I'll try to put up the two graphs on a web site if I can get a chance. Peter