Ebb & Flow
After threatening to fall though its summer-long support level, the biotech group continued to show resilience last week. The BioCentury 100 index dipped below the key 900 threshold on Wednesday, when it closed at 883, but regained 3.3% to 912 on Thursday and added another 1.3% on Friday to close the week at 924, up 1.9% on the week.
The rebound came as the "Big Three" equity market benchmarks avoided a seventh straight week of declines when equity buyers returned en masse the last two days to prop up the NASDAQ Composite, the S&P 500 and the Dow Jones Industrials. The NASDAQ finished the week up 6.2%, while the S&P 500 and the Dow Jones Industrials each advanced 4.3%.
Last week's rally was important, as the S&P 500 dropped below the 800 level before regaining to finish the week at 835.
While biotech's move appeared muted compared to the major indexes, the group had been holding up a bit better in the first place. With last week's bounce, the BioCentury 100 has gained in three of the seven weeks.
Biotech's relative out-performance is prompting Niall Kirk, assistant director of life science global funds at Foreign & Colonial in London, to voice hopes that the sector will begin to recover by year end. "The U.S. biotech sector has outperformed the S&P 500 by around 4% since the beginning of September - and this in the face of a potential approval problem from Transkaryotic that we saw in the previous week," he told Ebb & Flow.
The week prior, Transkaryotic (TKTX) tumbled $19.42 (60%) to $12.71 after the company said the FDA had rejected data on the primary endpoint the company planned to use in a marketing application for its Replagal Fabry disease treatment (see BioCentury,