Wall Street has an adage that it's best to take some skin out of the game during the summer months, when trading volumes diminish. But biotech investors adhering to that theme would have missed some pretty robust summer rallies going back to 1993. And if the tech markets are poised for a rally - a scenario to which many of the pundits had been warming prior to last week's tech selloff - biotech investors should double down rather than lighten up on the bet.

In the past two summer sessions - as measured by the period between Memorial Day and Labor Day in the U.S. (the last Monday in May to the first Monday in September) - the BioCentury 100 has doubled the performance of the NASDAQ Composite. Not that two years make a trend, but the gains are worth noting. Last summer, the NASDAQ's 32.1% upswing was eclipsed by a 67.2% move in the BC100. And in 1999, the BC100 moved up 36.8%, more than double the 15.1% move by the NASDAQ (see "Summer Trading").

But there's a downside, too: when the techs are out of favor, the selling is more severely reflected in the biotech group. In 1998, the 28.6% decline in the BC100 was more than double the 13.2% fall in the NASDAQ. And in 1996, the BC100 lost 15.2% of its value during the summer, nearly twice the 8.5% decline in the NASDAQ.

This summer's news flow for biotech promises to be robust. And one or two positive events from the big cap group could be enough to push the buyers into the majority. Keenly watched events include anticipated FDA approvals for Aranesp darbepoetin alfa to treat anemia associated with renal insufficiency or failure from Amgen (AMGN); a nucleic acid testing platform for HIV/HCV from Chiron (CHIR); formal approval for Natrecor nesiritide to treat acute congestive heart failure from Scios (SCIO); a July 26 FDA panel meeting for pramlintide, which is being developed by Amylin (AMLN) as an adjunct therapy to insulin to treat Type I or insulin-using Type II diabetes; an expected FDA panel review of FluMist influenza vaccine from Aviron (AVIR) at the upcoming Vaccine and Related Biological Products Advisory Committee on July 26-27; and Genentech (DNA) is awaiting FDA approval for its Xolair anti-IgE recombinant humanized monoclonal antibody, which was developed with Tanox (TNOX).

Public paper trickle

Two filed follow-ons don't represent a flood, but they do continue a trickle of underwritten paper. Both Scios (SCIO) and ConjuChem (TSE:CJC) filed to sell follow-ons last week that together would raise $140.2 million if sold at their respective prices prior to filing.