Despite some really bad product news, biotech stocks are enjoying an Indian summer, as the good news appears to have outweighed the bad. With two trading days left in the third quarter, the BioCentury 100 Price Level index has risen 14 percent since June 30, the majority of the gain coming in the last month.

One explanation is that investors are returning to a sector that's been overlooked this year. While the broader indexes continue to surge, at Friday's close of 1117.72, the BioCentury 100 is still underwater from its Jan. 1 starting point of 1198.86.