JMP: biotech performance flattens, look for product-driven stocks

By Lisa Kerner

Erie, Pa., April 24 - JMP Securities said biotech sector performance came back down to Earth in the first quarter and the highlight is now on product-driven stocks for the earnings season.

Following a strong 2005, the sector has performed in line with the broader markets in the first quarter.

Both the biotech indices, the large cap BTK and the broader NBI, modestly outperformed the pharmaceutical index, DRG, and the S&P 500. The BTK saw gains of 5% and the NBI realized gains of 6% in comparison to a 3% rise in the DRG and a 4% increase in the S&P.

The biotech gains have been hard to maintain since the start of the second quarter, however. The BTK is down 3% and the NBI is 4%, respectively, with the S&P remaining somewhat flat.

Mixed first-quarter results from biotech bellwethers such as Genentech, Amgen, Genzyme and MedImmune resulted in the biotech indexes trading relatively flat.

JMP believes investors can find value in several stocks to play the first-quarter 2006 earnings season (in descending market cap): Celgene, PDL BioPharma, Myriad Genetics and Genomic Health.

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