Big day for biotech

February 12, 2001: 4:24 p.m. ET

Biotech stocks soar as human roadmap is published for the first time
by Staff Writer John Chartier

NEW YORK (CNNfn) - Biotech stocks soared Monday as two versions of the architectural plans for the human genome were published, giving researchers access to the groundbreaking information and initiating a race to develop new drugs based on it.

On Monday, Celera Genomics (CRA: Research, Estimates) and the Human Genome Project, a government-sponsored international consortium of scientists, released their own versions of the book of life, opening the door for drug companies to the possibilities of not only curing some of evolution's most enigmatic diseases such as cancer, but also to preventing such genetic problems from occuring in the first place.

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Celera's shares jumped $6.15, or more than 14 percent, to $47.75 at the close of trading Monday on the New York Stock Exchange.

Other biotech companies also posted gains in trading Monday. Shares of IDEC Pharmaceuticals (IDPH: Research, Estimates) gained $2.44 to $61.75. Shares of Myriad Genetics (MYGN: Research, Estimates) rose $6.25 to $72.12, and Millennium Pharmaceuticals (MLNM: Research, Estimates) gained 38 cents to $41.31.

Last April, Celera announced it had completed the first step in unlocking the human genetic code. On Monday, both the company and the Human Genome Project published their findings in separate scientific research journals.

"What is news is that finally researchers have the actual genome, we have the data, but now the data is in widespread distribution," said James Reddoch, an analyst with Bank of America Montgomery.

And now that that information is widely available, there are several ways for biotech companies to profit from the information, Matt Geller, a biotech analyst with CIBC World Markets told CNNfn's Market Coverage Monday. (368K WAV) (368K AIFF)

But some dispute the published findings. Human Genome Sciences, a competitor of Celera's, claims the human genome is made up of more than 100,000 genes, not the 30,000 genes proffered by Celera and the project.

That difference could have implications for drug development and the time to market for those drugs.

William Hasseltine, Human Genome Science's chief executive, told CNNfn's Market Call that it would take 5-to-20 years to bring new drugs based on the research to market rather than the 50-to-100 years others have suggested.

The excitement generated by the mapping of the human genome has given a major boost to biotech stocks over the last several months, even as the markets have slumped in the face of a slowing economy.

The Monument Medical Sciences Fund gained about 32 percent in 2000, largely on the strength of the discovery, and the Nasdaq Biotechnology Index, which tracks about 200 U.S. and European companies, gained more than 20 percent in 2000.

Check out other biotech stocks
Although scientists cracked the genetic code months ago, Monday's publishing of the data is significant because for the first time it puts the information into the hands of other drug companies, Todd Nelson, a biotech analyst with Dain Rauscher Wessels said.

"Analysis is starting to get done, so this really contributes to what are already strong fundamentals," Nelson said. "When you have a catalyst like this it should reaffirm to people that this information does create demand across the board for life sciences products."

Lately, Wall Street had begun to sour on Celera's stock. Celera's share price has plummeted from its 52-week high of $276 to around $44 since the company announced it had cracked the genetic code last spring, because it had failed to provide analysts and investors with a clear picture of what the company would do next.

That changed Monday with the publishing of the human genome data, as the company affirms that it plans to use the research to develop new specialty drugs.

Other companies Dain Rauscher's Nelson believes will benefit from the day's news include Affymetrix (AFFX: Research, Estimates), Myriad Genetics (MYGN: Research, Estimates), and Curagen Corp. (CRGN: Research, Estimates), all of which work with new genetic research to develop drugs.

Companies that produce gene sequencing equipment are also expected to benefit.

Other stocks that could ride Celera's coattails include Amgen Inc. (AMGN: Research, Estimates) and Biogen Inc. (BGEN: Research, Estimates). Amgen's shares climbed $1.62 to $74.19, more than 2 percent. Biogen's shares gained $1 to $72.12.