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Small-cap biotech index rises as other biotech measures drop in September, Merrill report says
By Jennifer Chiou
New York, Oct. 5 - Most Merrill Lynch Biotech indexes were down in September, except the small-cap index, which climbed 2.6%, signaling investors had higher risk tolerance, according to a report from Merrill Lynch analysts Eric J. Ende, Thomas J. McGahren and Rita Vitiello.
During September, the Merrill Lynch Mid-Cap Biotech Index decreased 1.1% and the Merrill Lynch Large-Cap Biotech Index was down 2.6%, the report said. In the same period, the Merrill Lynch Therapeutic Index decreased 1.6% and the Merrill Lynch Genomics/Tools Index dropped 3.9%.
For the month, the Nasdaq Biotechnology Index rose 1.3%, the AMEX Biotechnology Index 3.4% and the S&P500 Composite index by 0.7%, the analysts said, adding the Nasdaq Composite index was flat.
Analysts noted the current four-week moving average funds flow is negative $2 million, including $39 million for the week ended Sept. 28, versus August's moving average of negative $46 million. Flows into health care/biotech funds are $1.4 billion thus far in 2005 compared to $1.0 billion for 2004, they added.
Merrill said total supply in the pipeline is $8.5 billion versus $8.3 billion in August. The figure includes registered initial public offerings plus shelf filings and follow-on sales.
During September, $667 million of new supply came into the market as compared to August when there was $1.2 billion of new supply, the report noted.
Of the biotech companies Merrill tracks in its indexes, Critical Therapeutics, Inc. recorded the best return of 54.4% for September, while Vion Pharmaceuticals Inc. posted the worst at negative 92.5%.
In terms of year-to-date return, the report said ViroPharma Inc. has the largest return of 540.0% while Xcyte Therapies, Inc. is in the cellar with a loss of 82.6%.
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