Hot Stocks: Biotech bustle

May 21, 2001: 4:33 p.m. ET

Positive analyst comments boost some biotechs; others flounder on news

NEW YORK (CNNfn) - Shares of several biotech firms surged Monday after Robertson Stephens raised ratings on Human Genome, Neurocrine Biosciences and Vertex Pharmaceuticals, based on positive fundamentals.

But shares of the biotech company BioSource International tumbled after two top management executives resigned for personal reasons.

And shares of drug developer Atherogenics slid after the company said its heart treatment had not yet reached its statistical goals in clinical trials.

Monday's winners
Human Genome (HGSI: up $5.07 to $73.00, Research, Estimates). Robertson Stephens raised its rating to "strong buy" from "buy," citing strong fundamentals and upcoming clinical milestones.

Neurocrine Biosciences (NBIX: up $6.59 to $38.03, Research, Estimates). Robertson Stephens raised its rating to "strong buy" from "buy," saying the company, which develops treatments for diseases of the central nervous and immune systems, should benefit from near-term positive drivers.

Vertex Pharmaceuticals (VRTX: up $5.22 to $41.73, Research, Estimates). Robertson Stephens upgraded the company to "strong buy" from "buy," citing expected strong sales from the company's recently approved cardiovascular product Angiomax.

Sun Microsystems (SUNW: up $2.99 to $22.96, Research, Estimates). In a $200 million agreement, Eastman Kodak (EK: up $0.26 to $48.76, Research, Estimates) chose the computer hardware maker to be its major storage provider for another five years. In addition, there was trader talk that the company's inventory levels may be improving.

Other tech leaders that followed Sun's lead included Cisco Systems (CSCO: up $2.67 to $22.87, Research, Estimates), Microsoft (MSFT: up $0.70 to $68.79, Research, Estimates) and JDS Uniphase (JDSU: up $2.31 to $23.50, Research, Estimates).

Sanmina (SANM: up $3.82 to $37.83, Research, Estimates). The maker of electronic components adopted a stockholder rights plan designed to assure stockholders fair value in the event of a takeover but the company also said there are no takeover plans in the works.

Ivanhoe Energy (IVAN: up $1.16 to $4.60, Research, Estimates). The energy exploration company and its joint-venture partner Aera Energy announced plans to start a new natural gas drilling program.

Siebel Systems (SEBL: up $5.76 to $54.97, Research, Estimates). Business-to-business leader Transpora will standardize several of Siebel's operations to enable Transpora to collaborate with customers worldwide. Siebel is a provider of e-commerce software. W.R. Hambrecht analyst Rich Peterson reiterated his "buy" rating on the stock.

Aquila (ILA: up $1.35 to $34.00, Research, Estimates). Lehman Brothers initiated coverage of the energy merchant with a "strong buy" rating, citing rapid market growth.

Youbet.com (UBET: up $0.61 to $1.36, Research, Estimates). The online gaming company said it formed a strategic relationship with Gemstar-TV Guide's (GMST: up $3.73 to $42.95, Research, Estimates) TVG division, a 24-hour interactive horse racing network that will make it easier for gamblers to bet online.

Palm (PALM: up $0.89 to $5.94, Research, Estimates). Shares of the handheld computer maker rose after UBS Warburg upgraded the stock to "strong buy" from "hold."

MP3.com (MPPP: up $1.84 to $4.85, Research, Estimates). Vivendi Universal (V: up $0.22 to $68.37, Research, Estimates), the world's largest music conglomerate, said Sunday that it will buy the provider of online digital music for $372 million, uniting two former foes in the battle over Web music distribution.

Vignette (VIGN: up $0.57 to $10.59, Research, Estimates). Salomon Smith Barney upgraded the maker of e-commerce software companies to "outperform" from "neutral" and raised the price target to $12 from $8, saying it believes the business has stabilized and that ties are deepening with key system integration partners.

Lowe's (LOW: up $4.10 to $72.50, Research, Estimates). The world's second-largest home improvement retailer said its first-quarter net earnings rose 20 percent, outpacing Wall Street forecasts despite a slowing economy.

VeriSign (VRSN: up $6.92 to $67.66, Research, Estimates). The U.S. government approved a deal allowing the Internet domain registrar to retain control of the lucrative ".com" Web addresses through 2007. In return, VeriSign will give up control of the ".org" domain along with a $5 million payment in 2002, the department said.

Walt Disney (DIS: up $1.68 to $34.28, Research, Estimates). Salomon Smith Barney upgraded the company to "buy" from "outperform" and raised the price target from $35 to $40, saying that it sees the soon-to-be-released movie "Pearl Harbor" as a catalyst from a psychological stand point.

Aspen Technology (AZPN: up $7.04 to $28.19, Research, Estimates). The maker of software for manufacturing companies was raised to "strong buy" from "buy" by First Union Securities Inc.

Veritas Software (VRTS: up $6.19 to $80.00, Research, Estimates). Pacific Coast initiated coverage of the software and programming company with a "buy" rating.

Toys "R" Us (TOY: up $2.37 to $30.96, Research, Estimates). The No. 2 U.S. toy retailer reported a wider-than-expected first-quarter loss, but the company said it continued to invest in steps to improve its business that drove up costs in the quarter.

Ivax (IVX: up $1.92 to $30.25, Research, Estimates). The company, one of the world's biggest generic-drug makers, said it would buy Laboratorio Chile SA, Chile's largest pharmaceutical firm, for $395 million cash in a move to bolster its presence in South America.

Monday's losers
BioSource (BIOI: down $3.01 to $7.25, Research, Estimates). The CEO of the biotech firm, Russell D. Hays, and chief operating officer George Uveges both resigned for personal reasons.

Atherogenics (AGIX: down $1.23 to $5.58, Research, Estimates). The drug development company said it has not determined if its heart disease treatment has met its primary statistical end in clinical trials. The treatment acts to reduce the narrowing of arteries after angioplasty.

Sulzer Medica (SM: down $2.75 to $16.40, Research, Estimates). Shares of the Swiss industrial company tumbled when its Sulzer Medica AG unit said it was not adequately insured for a December recall after the operations needed to replace defective hip implants surpassed 1,700.

Ford Motor (F: down $0.48 to $26.65, Research, Estimates). Credit Suisse First Boston downgraded the automaker to "hold" from "strong buy" and removed the stock from its "Focus List" due to concerns about the Explorer brand. Ford has recalled 50,000 model year 2002 Explorers for tire damage. CSFB said the integrity of the brand is now at risk.

Procter & Gamble (PG: down $2.23 to $65.25, Research, Estimates). The household products maker said it has agreed to buy the Clairol hair-care business from drugmaker Bristol-Myers Squibb (BMY: down $0.71 to $55.29, Research, Estimates) for about $5 billion in cash.

Apollo Group (APOL: down $2.02 to $33.48, Research, Estimates). The Phoenix higher education services firm said late Friday that an audit by the U.S. Education Department showed its Institute for Professional Development (IPD) unit and contract educational institutions violated a prohibition on the use of incentive payments for recruiting.

-- compiled by Catherine Tymkiw from staff and wire reports