Nov. 2, 2009 (PR Newswire) --
SAN FRANCISCO, Nov. 2 /PRNewswire/ -- It was a turbulent month as stocks values waxed and waned throughout culminating in a dramatic plunge on the last trading day of October as a report about a drop in consumer spending fueled worries that the economic recovery wouldn't be sustainable. The drop served to erase the previous day's big gains.
Biotech's steady improvement during the third quarter also came to an abrupt stop with the Burrill Biotech Select Index posting a 10 percent fall in value in October in contrast to the Dow, which finished unchanged and the NASDAQ, which fell 3.6 percent in value.
Almost all members of the Burrill Biotech Select Index saw a reversal in their share values. Heading the list was Affymetrix Inc. whose shares dropped sharply and closed the month down 40 percent after it posted disappointing third-quarter results and offered a soft revenue forecast for the fourth quarter. Rival Illumina Inc.'s shares suffered a similar fate closing the month down 24 percent after it reported third-quarter results and 2009 guidance below analyst estimates.
Amgen and Biogen both saw their share values drop 10 and 16 percent respectively. Biogen Idec's shares were hit following reports that the number of cases of a rare brain infection in patients taking Biogen's drug Tysabri is higher than previously reported. European regulators reported 24 cases of so-called progressive multifocal leukoencephalopathy (PML), more than twice the 11 cases Biogen reported in July. Amgen saw its shares drop on news that the FDA had requested additional clinical trials for its drug candidate Prolia before it will consider approving the drug for the treatment of bone-loss in breast and prostate cancer patients.
"There wasn't a lot to cheer about for biotech companies in October," said G. Steven Burrill, CEO, Burrill & Company, a San Francisco based global leader in life sciences with activities in Private Equity, Venture Capital, Merchant Banking and Media. "The nervousness about the strength of the economic recovery combined with weaker or average financial results took its toll on biotech's top companies.
"However, it wasn't just biotech's elite companies that took a hit. With investors nervous about the economy they have taking profits and cashing in on the excellent gains made by emerging biotech companies and, as a result, the Burrill Biotech Mid-Cap Index fell a whopping 18 percent and Burrill Biotech Small Cap Index was down 15 percent for the month.
"There has also been some investor uncertainty over the healthcare reform debate and this is likely to continue, as the legislators wade through the proposals," commented Burrill. "The drug industry certainly will take a big hit in the House bill, which was released by the Democrats at the end of the month.
