Monday, March 19, 2001
Don't be surprised if the NCAA College Basketball Tournament craze garners even more attention this year: traders and investors are searching for any excuse to stop watching the daily horrors of the market. In the first two weeks of March, biotech's loss for the year has doubled - from 17 percent between Jan. 1 to Feb. 28 to its current 34 percent decline. In fact, the BioCentury 100 has given back all of its 2000 profits and now stands 8 percent below its Dec. 31, 1999 level of 1990.05.
Biotech hasn't been singled out (see "Beware the Ides of March"). But the biotech selloff gives credence to the adage that bear markets look to puncture the tires that have the most air in them. The BC100 and the BioCentury London Index this month have dropped 20 percent and 16 percent, respectively. Last year, the BC100 and BC London were up 39 percent and 92 percent, respectively, compared to a 39 percent slide in the NASDAQ Composite.
Big cap targets in London
In London, decliners included big names such as antibody play Cambridge Antibody Technology (LSE:CAT), which fell 1012.5p (33 percent) to 2037.5p, and Celltech (LSE:CCH; CLL) which was down 137p (11 percent) to 1163p.
"One of the reasons for these falls is due to investors shorting the stocks," said Masha Le Gris, European analyst with Altium Capital. "The U.K. looks like a good buying opportunity as most stocks are near or below their fair value," according to Le Gris, who is not so positive about the other European markets, believing they still have a way to go before valuations begin to look realistic.
Some market watchers see CAT declining to 1500p before recovering, due to retail investor sales rather than any serious institutional movements.
London missed out on the news late on Friday that CCH had received an approvable letter from the FDA for Metadate CD extended-release capsules, a once daily treatment for children with attention deficit hyperactivity disorder (ADHD) (see B4). CCH closed with a market cap of £3.2 billion ($4.7 billion) and CAT has a market cap of £717 million ($1 billion).