Biotechnology stocks gain as investors renew interest in industry

November 11, 1992|By Michelle Fay | Michelle Fay,Bloomberg Business News

WASHINGTON -- Investors have turned their attention and their money back to the biotechnology industry.

Renewed interest in the sector, which has taken a beating thus far in 1992, doesn't follow any dramatic announcements, analysts said. Rather, it reflects the low cost of the stocks, potential new products and hopes for better days under President-elect Bill Clinton's leadership, they said.

The American Stock Exchange's Biotechnology Index rose 9.03 points, to 168.38, Monday, a three-month high, and continued the gain yesterday. It has been steadily rising from a three-month low of 130.60 on Oct. 9.

"I think people are just looking for laggards," said Stuart Weisbrod, an analyst at Merrill Lynch. "There are no fundamental changes for the group."

Merrill Lynch's biotechnology index is up 30 percent in the past month, Mr. Weisbrod said. However, it still trails the market and is down 30 percent from a year ago, he said.

The renewed interest boosted several stocks. Centocor rose $2.125 Monday, or 16 percent, to a three-month high of $15.125. The stock soared almost 50 percent in the past month, from $10.125 on Oct. 6. It closed yesterday at $14.75, down 37.5 cents.

"We haven't made any announcements," said Centocor spokesman Richard Koenig. "The whole sector is moving up."

Monday, an analyst at First Boston reiterated his "buy" position on Biogen Inc. and Genzyme Corp. and a "strong buy" on Amgen as part of a favorable review of biotechnology stocks. The analyst said the investment climate surrounding the biotech group is improving, research officials said.

The biggest news lately was Synergen's announcement that it completed the enrollment for the final testing of its sepsis drug Antril, said David Stone, a biotechnology analyst at Cowen & Co. Even that wasn't a breakthrough, because the company previously said the enrollment was almost complete more than a month ago, he said.

Synergen's stock closed at a three-month high of $55.875 after the news Monday, up 5.4 percent. It climbed further yesterday, closing at $56.25 a share.

The advent of a Clinton administration encouraged some investors about the future prospects of the biotechnology industry, analysts said. Mr. Clinton will take control of the White House on Jan. 20.

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