Ebb & Flow
Optimists should be cheering the fact that investors continued to bid up biotech during the final week in front of the American Society of Clinical Oncology (ASCO) meeting, which opened in Chicago last Friday, even when they had plenty of profits to take. Indeed, judging from the big bounces some stocks were getting, investors may have decided there was too much downside in getting out early.
Skeptics, however, might say that more air is being put into an already filled tire. The naysayers attribute a lot of last week's buying to the "unsophisticated" crowd, which also should give reason for pause.
The BioCentury 100 gained 6.5% on the week, largely driven by speculation in the cancer group. Last week's move put the index up 39.2% in the 12 weeks since it bottomed on March 7. Given that the group already had jumped 31% in the prior 11 weeks, some market watchers were expecting a pre-ASCO selloff.
Investors did take some profits. Abgenix (ABGX) - which was slated to present only one abstract on Phase II data for its ABX-EGF antibody as a monotherapy in metastatic colorectal cancer - slipped $0.57 to $10.64 last week. The stock already had advanced 80% since March 7.
But on the whole, investors last week piled money into cancer companies, especially ones slated to present later stage data (see "Still Going . . . " below). There was chatter that the buying was coming from a spattering of momentum/aggressive growth buyers and retail investors, with a bit more emphasis on the latter group.