Biotech's Hot and Getting Hotter

BOSTON (TheStreet) -- Someone forgot to tell investors that the biotech sector goes into slowdown mode during the summer; July was red-hot and August is looking to be just as busy.

The Nasdaq Biotechnology Index was up almost 9% in July, apace with the broader stock market rally. Human Genome Sciences(HGSI Quote), boosted by positive phase III lupus drug data, soared almost 400% during the month and the helped the company raise more than $300 million in a greatly over-subscribed follow-on stock offering.

A deluge of media attention and public concern about swine flu pushed a tiny drug stock like Inovio Pharmaceuticals(INO Quote) up 161%. BioCryst Pharmaceuticals(BCRX Quote) was up 128% in July for the same reasons.

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Bristol-Myers Squibb(BMY Quote) bought Medarex(MEDX Quote) for a 90% premium in July, and investors bid up shares of Acadia Pharmaceuticals(ACAD Quote) by 86% in anticipation of phase III results from its Parkinson's psychosis drug later this summer.

Even the large-cap biotech stocks had a great month, buoyed by what was generally a strong second-quarter earnings performance. Celgene(CELG Quote) was up 19% in July, Amgen(AMGN Quote) up 18%, while Biogen Idec(BIIB Quote) and Gilead Sciences(GILD Quote) managed to eek out smaller 5% gains during the month.

July and August are historically slow months on the biotech calendar. Clearly, the past 30 days broke the rule and August may too, as investors anticipate results of clinical trials and Food and Drug Administration approval decisions expected in August and through the fall.

Amgen has a date with an FDA advisory committee on Aug. 13 to discuss and review the company's osteoporosis drug denosumab. Sequenom(SQNM Quote), the once-highflying genetic test maker taken down by a data-fabrication scandal, may provide an important update during its second-quarter conference call on Aug. 6.