Money Shifts From Biotech to Pharma as Investors Get Defensive

As expected, health care investors took money out of the risky biotech sector and moved into more defensive drug stocks in Monday trading.

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At 12:45 p.m. EDT, the American Stock Exchange Biotech Index was down 26.40, or 5.3%, to 474.18. Given the circumstances, the selloff could have been worse -- a 5% drop in the biotech sector is not an uncommon occurrence. The American Stock Exchange Pharmaceutical Index was up 3.90 to 385.89.

Amgen(AMGN), the largest biotech company, is off $2.88, or 4.5%, to $61.25. Genentech(DNA) is down 71 cents, or 1.5%, to $43.85, Biogen(BGEN) is off $2.76, or 4.6% to $57.55, while Human Genome Sciences (HGSI) is off $3.94, or 9.4%, to $37.65.

Idec Pharmaceuticals(IDPH), which had a new cancer drug recommended for approval by an Food and Drug Administration advisory panel on Tuesday, was one of the few biotech stocks to actually trade up when the morning bell rang. Since then, Idec has also drifted lower, falling 1.21 cents to $54.93.

Interesting, three companies developing oxygen-carrying human blood substitutes are trading higher, although these stocks have a larger-than-normal retail ownership and volume is relatively low. Biopure(BPUR) is up 7 cents to $21.25, Northfield Laboratories (NFLD) is up 4 cents to $15, and Hemosol (HMSL) is up 19 cents to $2.97. None of the companies have products approved for use in the U.S.

Drug stocks are holding their own in today's turbulent market. Merck(MRK) is up $1.03, or 1.5%, to $67.13, Pfizer(PFE) is up 25 cents to $38.42 and American Home Products (AHP) is up $1.51, or 2.6%, to $59.68. Bristol-Myers Squibb(BMY) and Johnson & Johnson(JNJ) are also higher, while Schering-Plough (SGP) is off 66 cents to $36.53.

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