Biotech Penny Stocks Rally on SARS Speculation

Two low-priced biotech shares shot up Monday as traders speculated their products could have application in fighting the respiratory virus that is terrorizing Asia.

ViroPharma(VPHM Quote) was recently up 59 cents, or 37%, to $2.20 on volume that is already close to 20 times its daily average. AVI Biopharma(AVII Quote) was up 72 cents, or 26%, to $3.48, also on much higher than normal volume.

ViroPharma doesn't market a drug specifically targeting the disease, known as severe acute respiratory syndrome, but traders evidently believe its experimental anti-picornavirus agent, Piovir, would be a candidate for funding in SARS research. The company got a nonapprovable letter for the drug in treating the common cold last year, but it currently makes the drug available to patients with life-threatening picornaviruses.

Meanwhile, AVI Biopharma last week said a preclinical study involving 13 cats with so-called single-stranded RNA virus reduced their visible symptoms. The company said it's possible SARS falls into this virus family.

So far, SARS is thought to have resulted in 62 deaths worldwide, most of them happening in Asia but at least four in Toronto. On Monday, Hong Kong authorities quarantined an apartment complex with 92 people are believed to be infected.