Judging by the amount of money brought in last week by publicly held biotech companies, one would have difficulty discerning that the tech market (yes, including biotech) is in a nasty funk.

Seven PIPEs, two IPOs and three follow-ons raised $1.2 billion. The feat is more impressive in a week in which the biotech market was hit with profit taking that drove the BioCentury 100 down 10 percent. The index has fallen 16 percent since the Nov. 7 U.S. presidential election, and has now surpassed the 11 percent drop in NASDAQ composite. NASDAQ traded down only a fraction of a percent in a volatile week last week.

The biotech downdraft was sparked by a Barron's article that declared biotech profits remain "dangerously exposed" and recommended that investors take profits while they still exist (see BioCentury Extra, Monday Nov. 13). The article, along with a technology sell-off spurred by an earnings warning from Hewlett-Packard, drove the BioCentury 100 down 8.5 percent on Monday.

Still, Mitch Silber of The Carson Group argued that the biotech fundraising feats have everything to do with the sector's performance relative to other tech groups. Even with last week's slide, biotech remains a shining star. Year-to-date the BioCentury 100 is up 47 percent, while NASDAQ is down 26 percent. "Biotech is the best performer in the NASDAQ composite, and it's really been seen as the sector that's immune to economic concerns and technology earnings surprises," he said.

He's impressed at how the sector bounced back from the negative Barron's article, which ran over the prior weekend. "On Monday and Tuesday, the article caused a stir, and a lot of people were asking is this the spark like the Clinton/Blair comments in March? But the sector's come back nicely," he said.

However, the stock sales also raise the question of whether the new deals are taking money away from the aftermarket. Robertson Stephens banker Mark Simon doesn't believe so, arguing that massive amounts of money wants to find its way into the sector because investors see biotech as the one place to make big returns.

"In the 90s, businesses like the internet, the personal computer and wireless technologies represented open-ended upside. But open-ended upside is no longer found in the internet and high-tech sector, and biotech is now the one sector that offers that kind of upside," he said.

Tarnished by success

All three stocks mentioned in the bearish Barron's article remained down at least 15 percent or more on the week. And of the three, only Idec (IDPH) managed to trade up from its Monday close, helped by the pricing of its $472.7 million follow-on on Thursday. IDPH was still down $29.188 (15 percent) on the week at $170.50, after falling $30.188 to $169.50 on 3.3 million shares on Monday.

Antibody play Protein Design Labs (PDLI) closed Friday at $85, down $40 (32 percent) on the week, after tumbling $29.50 (24 percent) to $95.50 on 3.4 million shares on Monday.

Meanwhile, small molecule drug developer Vertex (VRTX) closed Friday at $63.125, down $25.688 (27 percent) on the week, after shedding $17.625 (20 percent) to $71.188 on 2.3 million shares on Monday.

The stocks were highlighted in Barron's because they were the only components in the 17-company AMEX Biotech Index that have traded up more than 50 percent in the last three months.