Biotech Rebounds on Perception of Safety

Times Staff, Bloomberg News

Apparently, biotechnology stocks might be just the cure for what ails some investors: fear of exposure to foreign markets.

MedImmune Inc. shares paced a rare sector rally Wednesday, surging 20% on optimism for biotech stocks, which analysts say are not affected by ongoing global economic turmoil.

Stock of MedImmune rose $8.88 to close at $52.25 in Nasdaq trading of 1.05 million shares, more than three times the three-month daily average.

The stock is snapping back after falling about 34% in the last two weeks as investors realize that MedImmune and other biotech companies aren't exposed to the economic troubles in Asia and Russia, analysts said. Russia helped send world markets into turmoil when it devalued its currency and defaulted on debt two weeks ago.

"Biotechs are unscathed by foreign issues," said BancAmerica Robertson Stephens analyst Jay Silverman, who rates the stock a "strong buy."

Shares in other biotechnology companies also advanced. Thousand Oaks-based Amgen Inc. climbed $2.25 to $63.50, Biogen Inc. rose $1.13 to $48.63, Genentech Inc. gained $1.75 to $66.75, and Sepracor Inc. surged $5 to $50.

"It may have taken this current shake-up to have investors focus on the inherent, long-term value in the biotech sector," the not-exactly unbiased Biotechnology Industry Organization said in a statement. BIO represents more than 800 biotechnology companies, academic institutions and state biotech centers.

Prudential Securities Inc. analyst Caroline Copithorne said Gaithersburg, Md.-based MedImmune is one of the most dependable companies in the industry, reiterating her "strong buy" rating on the stock.

The company's Synagis drug won clearance in June from the Food and Drug Administration for use in preventing the infection behind most cases of childhood bronchitis and pneumonia.


Opportunity in Biotech?

The Amex biotechnology index of 16 stocks has sunk to a nearly three-year low. Monthly closes and latest:

Amex biotechnology index

Wednesday: 111.35

A Sampling of Stocks

Many biotech shares are still way down from their peaks, despite Wednesday's rally. A sampling of biotech stocks:


52-week % decline Stock Ticker high Wed. close from high Advanced Tissue Sciences ATIS $18.50 $2.13 -88.5% Organogenesis ORG 37.81 11.13 -70.6 Protein Design Labs PDLI 51.50 17.13 -66.7 Cor Therapeutics CORR 26.13 9.81 -62.5 Vertex Pharmaceuticals VRTX 41.00 16.88 -58.8 Gilead Sciences GILD 47.25 20.00 -57.7 Immune Response IMNR 19.69 8.88 -54.9 MedImmune MEDI 68.88 52.25 -24.1 Amgen AMGN 79.38 63.50 -20.0 Genentech GNE 73.75 66.75 -9.5 Amex biotechnology index -42.8 S&P; 500 index -16.8


Source: Bloomberg News

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