Merrill's Bio-I Score declines, biotech stock demand also down

By Lisa Kerner

Erie, Pa., April 13 - The BIO-I Score declined to -4 from -2 following poor aftermarket performance, according to Merrill Lynch analyst Eric Ende's industry overview.

Specifically, Ende points to the last three IPOs that have fallen below deal price. Additionally, 12 of the last 13 follow-on offerings have broken below deal price.

The demand for biotech stocks also declined, measured by the aftermarket performance of recently priced IPOs, follow-on offerings and negative fund flows.

Ende believes the large and mid/small cap sector is in for a bit of a rough ride.

In the report, his advice is to be selective on both stocks and timing. He suggests using weakness as a long-term opportunity to purchase selective biotech stocks - those with good growth prospects and key near-term catalysts - citing Amgen, Genzyme, Celgene, OSI Pharma, Cubist, Theravance, MGI Pharma, New River, PDL Biopharma, Altus, Keryx and Alexion.

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