Genomics stocks continue to lead the biotech sectors on a downward slide Wednesday morning.
Celera Genomics dropped another 4.7 percent by mid-day after shedding 7 percent Tuesday.Incyte Genomics slipped another 4 percent following a 4.2 percent decline the day before. And the market chipped an additional 5.4 percent of Affymetrix stock following a previous day decline of 5.1 percent.“The genomic stocks,” said AG Edwards analyst Alexander Hittle, “are like biotech stocks on steroids.” So when biotech and pharma slip, genomics dive. Part of the dip, say analysts, is standard market animal forces. The sector has done really well through the summer, and investors are taking their profits and rebalancing their portfolios.
Genomic stocks are also being hit especially hard because “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.
Add to that, said Gibbons, at least half dozen genomic platform and bioinformatic initial public offerings in the same time frame and you have a market glut of genomic shares.
“The presidential politics are also possibly playing a role,” said Gibbons, with investors having the long weekend to take in the rhetoric on pharmaceutical pricing.
Despite all these factors, Gibbons thinks 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.”