Many Md. stocks battered in turmoil OncorMed off 38%

Martek down 20%

but COMNET is up

July 17, 1996|By Mark Guidera | Mark Guidera,SUN STAFF

Talk about turning up the heat. Investors in Maryland-based stocks have been feeling it this week.

Shares of many Maryland-based high-technology and biotechnology companies have taken a licking as one spirited round of selling on Wall Street after another has driven technology-related issues down.

But the recent blood-letting for Maryland stocks hasn't been limited to technology-related issues. Shares in financial institutions such as Alex. Brown & Sons, and service providers, such as Sylvan Learning Centers, Inc., have also taken a hit in the downturn.

Bargain hunters who stepped in late during yesterday's wild ride on Wall Street may have saved many Maryland technology issues from significant losses. The Dow Jones industrial average was down more than 167 points in the afternoon before recovering to close up 9.25 points.

But that was of little solace for investors in many issues, particularly technology-driven ones. The Nasdaq composite index, which includes many technology-related issues, finished the day down 6.72, to 1053.47.

Among the 20 worst Maryland-based stock performers during the past five days, 16 of them are technology- or biotechnology-related.

Hold shares in Gaithersburg-based medical test provider OncorMed? You've been kicked in the pants. Its shares are down more than 38 percent since July 11. Did you bet on high flying HCIA Inc., the Baltimore-based health-information company? Arrgh. HCIA shares are down more than 18 percent since July 11.

One bright spot on the Maryland technology scene: COMNET, a Lanham computer services company that owns 81 percent of Group 1 Software, which sells software for controlling mass mailings.

COMNET's stock has been the best performer on Bloomberg Business News' Maryland Stock Index since July 11. Yesterday, COMNET gained $4 a share to close at $15.50.

Alex Zisson, a biotechnology analyst who covers several Maryland-based biotechnology companies for Hambrecht & Quist in New York, said the drubbing that technology-related companies have been seeing is driven by the broad downturn in the stock market.

"Many small biotechnology company stocks are being caught in the down draft of the market," Zisson said. "They have seen their stocks cut in half in this correction."

To get a sense of just how rough the market has been on some companies' stocks, take Martek Biosciences. The Columbia-based company is awaiting Food and Drug Administration approval to market in the United States a nutritious infant formula additive it developed from microalgae. It's also struck several deals with major formula manufacturers to supply the product for distribution in Europe.

Between July 24 of last year and April 1, Martek's shares climbed from $11.50 to a 12-month high of $37.75.

However, during the past five trading days, Martek's shares have dropped nearly 21 percent. Yesterday was another bad day for Martek. Its shares took a hit of nearly 10 percent, closing at VTC $21.25, down $2.

Other promising companies have felt the pain. Shares of Baltimore-based Guilford Pharmaceuticals, a recent darling of investors, have been reeling.

The company, which saw its stock price climb from $6.75 last August to a high of $38 on June 14 when it received a favorable FDA hearing for its brain cancer wafer, has seen its share price cut almost in half since the high.

During the past five days, Guilford's shares have dropped nearly 17 percent. Yesterday, Guilford's shares lost nearly 13 percent, closing at $17.325, down $2.625. That's a one day market devaluation for the company of $23.6 million.

"The market seems to be turning its back on bio-pharmaceuticals in general and no one really knows why," said Nick Landekic, Guilford's vice president for business development.

"It's a bit frustrating for us since we've had no setbacks or negative news at all," he said. "But in all honesty we care more about what the stock price is a year from now than what it is a day from now. That's how you stay focused on building a company for the long term."

Zisson, the analyst, said the wild ride for technology-driven companies may be slowing.

The Nasdaq, he said, has seen a drop of about 20 percent since its high on May 22. "Most analysts are hoping that should be it."

Pub Date: 7/17/96

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