3rd Quarter Stock Preview: Wanted: Inflows

The convergence of negative milestones and dour overall market conditions led mutual fund dollars to flee speculative growth stocks, including biotech, last quarter. The results weren't pretty: money flows were negative in healthcare/biotech mutual funds 12 out of 13 weeks in the quarter, and the BioCentury 100 Index posted a quarterly double-digit percentage decline for only the second time since the bottom - and end - of the bear market in March 2003.

Given those numbers, biotech buysiders are divided on what the rest of the year holds. One camp maintains that a biotech updraft won't happen in a vacuum and requires a turnaround in macro conditions. The other group is less concerned with the macro climate and thinks biotech might be able to dig its own way out of the red. Those buysiders see value plays across biotechs of all sizes. Many expect that large, profitable biotech companies may lead a charge in the second half, driven by strong second quarter financial results throughout July. ...