Cepheid surges, biotech stocks up
By Ted Griffith, CBS.MarketWatch.com
Last Update: 3:00 PM ET March 11, 2002
NEW YORK (CBS.MW) -- Biotechnology stocks moved higher Monday with shares of Cepheid among the leading advancers after the company said it was developing new systems that could be used in detecting the threat of bioterrorism.
The Amex Biotechnology Index (BTK: news, chart, profile) rose 0.9 percent while the Nasdaq Biotechnology Index (NBI: news, chart, profile) added 0.2 percent in afternoon trading.
Shares of Cepheid (CPHD: news, chart, profile) jumped $1.01, or 34 percent, to $3.97. The Sunnyvale, Calif.-based maker of genetic detection systems said it was working with defense contractor Northrop Grumman (NOC: news, chart, profile) on developing new DNA-based "biothreat detection technology" that could potentially be used by the U.S. Postal Service. However, the companies said the U. S. Postal Service has yet to award the contract.
Shares of Northrop rose $3.02 to $108.94.
Since last year's anthrax exposures on the East Coast, companies, such as Cepheid, whose technologies might be used in defending against biological attacks have been in the spotlight. Coming in the wake of the Sept. 11 terrorist attacks, anthrax-laced letters claimed several lives and heightened fears throughout the nation late in 2001.
Shares of Cepheid climbed as high as $11.48 amid the fears, but the stock has since come back down as investors wonder how lucrative the bioterrorism field will really be.
Overall, since the Sept. 11 terrorist attacks, biotech stocks have had a wild ride. Monday marked six months since the attacks.
By the end of the first week of post-Sept.11 trading, the Amex Biotechnology Index was down 20 percent from its pre-attack level. The biotech index has since mounted a comeback and is now about 2 percent above where it closed on Sept. 10. Some analysts have said there could be more gains in the spring when biotech firms will be highlighting their experimental medications at medical conferences.
Joe Duarte, president of River Willow Capital Management, said he believes investors can do well in biotech, provided they focus on firms that are enjoying a high rate of sales growth with their medications. Duarte said among his current favorites is Genzyme (GENZ: news, chart, profile), shares of which edged up 22 cents to $46.60.
"I'm quite positive on biotech," said Duarte, author of a book called "Successful Biotech Investing." "The sector is acting very well right now."
Elsewhere on Monday, shares of Biogen (BGEN: news, chart, profile) continued to come under pressure, losing $1.05, or 2 percent, to $50.60. Shares of Biogen had fallen sharply Friday after rival Serono said it won U.S. regulatory clearance to sell a drug that will compete with Biogen's flagship multiple sclerosis treatment Avonex. See full story.
After surging Friday, shares of Serono (SRA: news, chart, profile) moved modestly higher Monday, trading up 18 cents to $22.39.
In the pharmaceutical sector, shares of the newly rechristened Wyeth (WYE: news, chart, profile) slipped 66 cents to $61.59 in recent trading.
American Home Products is changing its name effective Monday to Wyeth, to reflect the company's focus on pharmaceuticals. Wyeth-Ayerst Laboratories was the pharmaceutical unit of American Home. The Madison, N.J. -based drugmaker said its new ticker symbol is WYE. The stock will continue to trade on the New York Stock Exchange.
The Amex Pharmaceutical Index ($DRG: news, chart, profile) was virtually unchanged in recent action.
Ted Griffith is a reporter for CBS.MarketWatch.com |
