Biotechnology shares rose, gaining back value lost following the US terror attacks as investors grew confident that the group may escape some of the impact of a recession and rushed in to pick up small-cap bargains.
Most of the biggest percentage gainers were small companies, including Biotransplant Inc, which rose US$1.30, or 30 percent, to US$5.50 and Ariad Pharmaceuticals Inc, which rose US$0.49, or 25 percent, to US$2.45. Texas Biotech Corp rose US$0.65, or 13 percent, to US$5.65.
Now, some investors say third quarter product sales won't be affected by the economic slowdown and that biotechnology shares fell too far after the Sept. 11 attacks. In the first trading week after the attacks, the NASDAQ Biotechnology Index fell 17 percent, adding to a 23 percent decline since Jan. 1.
"Nothing has really changed as far as the fundamentals of the sector go," said Alidad Mireskandari, co-manager of the Orbitex Health & Biotechnology Fund. "When you look at the sector, you have to say it was severely oversold." Still, shares of large, profitable biotechnology companies, such as Amgen Inc. and Biogen Inc, fell as small companies dominated the rally, a turnaround that surprised investors.
"We thought it would be a large cap lead out of" the recent decline in the market, said Greg Aurand, co-manager of the Orbitex Health & Biotechnology Fund, whose largest holdings include Amgen Inc and Idec Pharmaceuticals Corp.
Shares of Amgen., the world's largest biotechnology company, fell US$0.68 to US$58.77. Biogen Inc, maker of the top-selling multiple sclerosis treatment Avonex fell US$1.38 to US$55.58.
Investor Stephen Flaks, manager of Flaks Partners LP, a hedge fund that invests in biotechnology companies, said shares of small companies with promising pipelines and technologies were "compelling" buys.
Flaks said he was taking advantage of the downturn in the market to load up on shares of Texas Biotech, which markets a heart drug with SmithKline Beecham Plc, and Neose Technologies Inc, which develops technologies for synthesizing enzymes in drugs.
"I was actually surprised after the disaster that the biotechs went down as much as they did," Flaks said. "Biotech is not a safe haven like drug stocks, but on the other hand you're not going to have the earnings recession as in other industries."
Flaks is also buying Immunex Corp, whose shares have tumbled 53 percent this year because the company has been unable to make enough of its Enbrel rheumatoid arthritis drug to meet demand.
Immunex is expected to complete a new plant in mid-2002, resolving the manufacturing constraints.
"I think it's got a lot of room on the upside," Flaks said.
Shares of Immunex moved up US$0.36 to US$18.68.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by