For the entire first quarter, the CBT 200™ was down 44 points or 1.1%, against the backdrop of a slightly higher general market. The broad market indexes eked out gains in the small fractions. Like last year, biotech is trailing the general market slightly, though the tendency is less pronounced this year than in 2006. At its present level, biotech stands 10.3% above its lows of last summer and 5.7% (or 233 points) below the highs of mid-January.
Breadth was in line with the small decline. There were 104 biotech companies that made gains, while a slightly larger 111 issues gave up ground. That means there were 1.1 decliners for every advancing stock, a result that was almost even. In companies with big changes in price, the advantage went to the positive side. There were 16 biotechs that climbed at least 10% higher, while 10 companies dropped a double digit amount, a ratio of 1.6 big winners for every big loser.
Taking away the market capitalization factor of the CBT 200™, the average share of a biotech company rose 1.28%, a big positive discrepancy over the half-percentage point decline in the index. Once again, Amgen (NASDAQ:AMGN) was a major contributor to the decline of the CBT 200™, dropping more than 3.5% to $55.88, a new two-year low.
The Monday edition of Barron’s carries a review of Alzheimer’s drugs, with particular attention to Wyeth (WYE), which has 11 AD drugs in development. Two of them are being developed in partnership with Elan (NYSE:ELN). The new drugs treat the actual cause of the disease, rather the effects, which presently available drugs can alleviate, though the help does not stem the progress of the disease.
At a recent investor conference, Wyeth’s CFO said that each individual compound in development stood a better chance of failing than succeeding, given that AD is so difficult to treat. On the whole, however, he thought there was a good chance that at least one will succeed. Barron’s sees an increase of 20% in the price of Wyeth, and a possible deal from a bigger pharma, now that Wyeth’s phen-fen troubles are behind it. A plug from Barron’s is usually worth a pop of a few percentage points on Monday morning.
In the IPO sector, device maker SenoRx (SENO) made its debut during the last week. The company had to scale back its asking price from an $11-$13 range to just $8, but from there on, things went smoothly. SenoRx makes a vacuum-assisted biopsy system that is used in the diagnosis of breast cancer. SenoRx closed the week at $8.19, an increase of 2%.
On the CBT 200™ list, Dendreon (NASDAQ:DNDN) was the clear winner over the last five sessions with a spectacular 189% gain. The company received a surprise recommendation from the FDA advisory committee for its prostate cancer immunotherapy Provenge (see story). The data from a small trial was ambiguous, leading some traders to recommend shorting the stock before the meeting. The shorts were done in by the committee, which overlooked the problems of Provenge in favor of an undeniable increase in median survival. Dendreon closed the week at $12.93, a gain of $8.46.
Biosite (BSTE) also did well, moving up 52%. The company received an offer of $85 per share, totaling $1.5 billion, from Beckman Coulter (NYSE:BEC). Both companies make medical diagnostic tests, and they have a heart failure test that they have developed jointly. Biosite gained $28.59 to end at $83.97. But holders of Beckman Coulter saw their shares drop $3.19 to $67.08.
Targeted Genetics (TGEN) roared 44% higher on a positive Q4 report. The tiny $40 million biotech company announced a $2 million increase in revenue, which was also a double over the previous year’s quarter, which convinced investors to look at the company in a new light. Targeted jumped $1.13 to $3.71.
Cell Genesys (CEGE) was up 40%, riding the coattails of Dendreon. Like Dendreon, Cell Genesys is working on a cancer vaccine, and the Dendreon success functioned as a sort of proof-of-principle for all such companies. Cell Genesys shot $1.21 higher to $4.20.
BioSante (BPA) rounds out the top five in biotech last week, with a 28% gain. The company received a $7 million milestone payment from Bradley Pharma. Bradley licensed the estradiol gel Elestrin from BioSante, and the payment is one of two that accrued from approval of the drug. BioSante climbed $1.29 to $5.97.