Merrill Lynch biotech indexes mostly unchanged to higher in June

By Jennifer Chiou

New York, July 5 - The majority of Merrill Lynch biotech indexes finished June up or unchanged, except for the Merrill Lynch Large Cap index's slide of 1.3%.

Merrill Lynch reported that investors are now putting money in the more risky, small-cap biotechs as flows into the sector have been positive in past weeks - $50 million for the week ended June 29 for a four-week moving average of $68 million.

During the last month, the Merrill Lynch Therapeutic and the Merrill Lynch Genomics/Tools indexes remained flat while the Merrill Lynch Small Cap Biotech Index rose 6.3% and the Merrill Lynch Mid Cap Biotech Index increased 3.7%.

In the past, the sector has picked up performance in August after slow summer months.

Biotechs posted four-week moving average fund flows of $311 million in May. Flows into funds are $1.6 billion thus far in 2005 compared to $1.0 billion at the same point in 2004.

During June, $463 million of new supply came into the market versus May's $128 million of new supply. The year-to-date supply is now $3.9 billion. Of the total, convertibles contributed $2 million.

Five biotechnology company's shares will be released from initial public offering lockup through September.

During June, the Nasdaq Biotechnology and American Stock Exchange Biotechnology indexes went up by 1.8% and 2.5%, respectively. The S&P 500 Composite Index remained flat, though, and the Nasdaq Composite Index drooped by 0.5%.

Of the biotech companies Merrill Lynch tracks, Vicuron Pharmaceuticals Inc. recorded the top return of 69.3% for June, while Advancis Pharmaceutical Corp. slumped at negative 61.4%.

For the year so far, Northwest Biotherapeutics, Inc. has posted the highest return of 361.5% and AeroGen, Inc. the poorest at negative 79.7%.

Amgen, Inc. has the highest short interest at 22 million shares.

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