Silke
01.03.2001, 20:02
PDLI, biotech stocks slide
Analyst blames prevailing pessimism about tech sector
By Ted Griffith, CBS.MarketWatch.com
Last Update: 1:52 PM ET Mar 1, 2001
NEW YORK (CBS.MW) -- Biotechnology stocks headed lower in a broad decline Thursday, with at least one analyst suggesting that investors' general pessimism about technology stocks was spilling over into the biotech sector.
The Amex Biotechnology Index (BTK: news, msgs, alerts) dropped 6.1 percent and the Nasdaq Biotechnology Index (NBI: news, msgs, alerts) lost 4.7 percent.
Robert LeBoyer, senior biotechnology analyst with Boston-based Leerink Swann & Co., said overall weakness in tech stocks is hurting biotech stocks. The tech-heavy Nasdaq Composite Index ($COMPQ: news, msgs, alerts) has fallen to a two-year low amid gloominess about the economy and faltering earnings. In a pessimistic climate, biotech stocks suffer because many of the companies have yet to translate promising science into profits, LeBoyer said.
"Biotech companies tend to be valued based on the potential of future products," LeBoyer said. "They have good ideas, but they have to be developed over years. When optimism fades, those drug-development ideas are valued a lot less."
LeBoyer said Protein Design Labs (PDLI: news, msgs, alerts) stock was among the biotech shares suffering because of negative investor sentiment. He said the company is generating strong revenue from licensing of its technology and he said he expects it will be profitable in 2002. Protein Design Labs stock fell $6.25, or 10 percent, to $56.38 in recent action.
Also on the downside were shares of Corixa Corp., which fell 1.06, or 6.9 percent, to $14.44, exacerbating the previous day's decline. Shares of Corixa (CRXA: news, msgs, alerts) fell Wednesday after the Seattle-based biotech reported a wider-than-expected loss. SG Cowen analyst Bill Tanner Wednesday cut his rating on Corixa stock from "strong buy" to "buy." In a note to clients, Tanner cited "growing uncertainty surrounding late-stage products in the company's pipeline."
Shares of Millennium Pharmaceuticals (MLNM: news, msgs, alerts) lost 69 cents to $33.06 in recent action. Millennium stock had been up at the open of trading after the Cambridge, Mass.-based company said it had advanced into the second phase of patient testing with an experimental treatment for multiple myeloma, a type of cancer
Ted Griffith is a reporter for CBS.MarketWatch.com
Analyst blames prevailing pessimism about tech sector
By Ted Griffith, CBS.MarketWatch.com
Last Update: 1:52 PM ET Mar 1, 2001
NEW YORK (CBS.MW) -- Biotechnology stocks headed lower in a broad decline Thursday, with at least one analyst suggesting that investors' general pessimism about technology stocks was spilling over into the biotech sector.
The Amex Biotechnology Index (BTK: news, msgs, alerts) dropped 6.1 percent and the Nasdaq Biotechnology Index (NBI: news, msgs, alerts) lost 4.7 percent.
Robert LeBoyer, senior biotechnology analyst with Boston-based Leerink Swann & Co., said overall weakness in tech stocks is hurting biotech stocks. The tech-heavy Nasdaq Composite Index ($COMPQ: news, msgs, alerts) has fallen to a two-year low amid gloominess about the economy and faltering earnings. In a pessimistic climate, biotech stocks suffer because many of the companies have yet to translate promising science into profits, LeBoyer said.
"Biotech companies tend to be valued based on the potential of future products," LeBoyer said. "They have good ideas, but they have to be developed over years. When optimism fades, those drug-development ideas are valued a lot less."
LeBoyer said Protein Design Labs (PDLI: news, msgs, alerts) stock was among the biotech shares suffering because of negative investor sentiment. He said the company is generating strong revenue from licensing of its technology and he said he expects it will be profitable in 2002. Protein Design Labs stock fell $6.25, or 10 percent, to $56.38 in recent action.
Also on the downside were shares of Corixa Corp., which fell 1.06, or 6.9 percent, to $14.44, exacerbating the previous day's decline. Shares of Corixa (CRXA: news, msgs, alerts) fell Wednesday after the Seattle-based biotech reported a wider-than-expected loss. SG Cowen analyst Bill Tanner Wednesday cut his rating on Corixa stock from "strong buy" to "buy." In a note to clients, Tanner cited "growing uncertainty surrounding late-stage products in the company's pipeline."
Shares of Millennium Pharmaceuticals (MLNM: news, msgs, alerts) lost 69 cents to $33.06 in recent action. Millennium stock had been up at the open of trading after the Cambridge, Mass.-based company said it had advanced into the second phase of patient testing with an experimental treatment for multiple myeloma, a type of cancer
Ted Griffith is a reporter for CBS.MarketWatch.com