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Biotech Stocks Lose Edge

Although still riding high, biotech stock prices came down a bit in October and November. By early December, the Nasdaq Biotechnology Index, which tracks more than 100 of the biotech companieslisted on the exchange, was still up 30% from the preceding year, but it had lost 6% of its value during the previous three months. The Nasdaq as a whole, however, had seen an even more aggressive run-up over the prior year, with a 40% increase, boosted by recent interest in neglected tech stocks.

The fate of all the life sciences companies listed publicly in the United States has largely mirrored the Dow of late, with each index posting similar three-month gains in the low single digits and increases for the preceding year in the low double digits.

Within the life sciences, health care services companies, which saw their growth lag that of other sectors earlier in the year, claimed the strongest increase last fall and early winter. In fact, two of the top gainers were the nursing home operators Extendicare and Kindred Healthcare, both holdovers from Acumenís December list of top gainers.

Two other companies also remained on the list: the medical imaging firm Amersham Biosciences, which General Electric announced it would purchase, and Align Technology, a dental device company. In the third quarter, Align grew its revenue by 50% from the previous quarter and narrowed its losses; the company is expected to show a profit soon.

Two newcomers to the list were the nutraceuticals companies Usana Health Sciences and Nu Skin Enterprises, both based on consumer-to-consumer sales, similarly to Amway. Because of their global marketing and rapidly expanding revenue, they have become market favorites.

Among the decliners, Biovail fell again, this time due to a Securities and Exchange Commission investigation of its accounting practices and financial reporting. MedImmune dipped, too, and dramatically lowered its forecast for its recently approved flu vaccine, FluMist.


Copyright © 2004 Acumen Sciences, LLC, All Rights Reserved.


Additional charts accompanying text include:

Top Gainers

Top Decliners

Best- and Worst-Performing Sectors

Life Sciences Market Performance

Industry Sector Breakdown



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Metrics

BioMetrics: Industry projections for the year ahead.

Pipeline: More money on clinical trials doesnít translate into new drugs.

Capital Markets: Big M&A deals are back.

» BioIndex: The best- and worst-preforming equities. Plus, investment banks rate life sciences companies.

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