Genomics stocks closed sharply lower on Wednesday as the biotech sector tumbled for a second day due to profit-taking following the long holiday weekend, analysts said.
Celera Genomics (NYSE: CRA) closed at 100 7/16, down 4 1/16, or 3.9 percent, following a 7 percent drop on Tuesday. Incyte Genomics (Nasdaq: INCY) ended the session down 2 1/16, or 5.4 percent, at 36 1/2 following a 4.2 percent decline the previous day. And Affymetrix (Nasdaq: AFFX) shed 4 15/16, or 6.6 percent, to close at 70 on the heels of a 5.1 percent decline on Tuesday.
The Combined Biotech Index (Nasdaq: $IXBTX) lost 68.33 points, or 5.2 percent, to close at 1,253.18.
“The genomic stocks are like biotech stocks on steroids,” said AG Edwards analyst Alexander Hittle, “So when all of biotech and pharma are going down, the genomics stocks are going to go down even more.”
Analysts attributed part of the dip to profit-taking following the summer rally. Genomic stocks are also being hit especially hard as many lockup periods are scheduled to expire.
“There are at least 10 companies for whom their six-month lockups will expire from mid-September to early November,” said Winton Gibbons, genomic sector analyst at William Blair.
In addition, a handful of genomics and bioinformatics companies are scheduled to go public in the near future, which will cause a glut of shares in the sector.
InforMax, DoubleTwist, Genomica, NetGenics, and Third Wave Technologies are among the companies in the pipeline for offerings.
Despite these factors, Gibbons said he think investors are still excited about the sector. “You’ve got at least four investor conferences coming up between now and the first week of October,” he said. “There’s still demand out there.”