Burgeoning enthusiasm for the race to map the human genome reached a fervor Thursday as investors poured money into biotechnology stocks.
, of Rockville, Md., led the pack, surging 32 7/8, or 30%, to close at 144. The company's stock was the top percentage gainer on the
New York Stock Exchange
The company, spun out from
in early May, said it had purchased a software tool called
, which determines the functions of genes and proteins, from closely held
Molecular Applications Group
of Palo Alto, Calif. The company's stock is up more than 900% since it debuted May 6.
If the news drove the stock, though, that was merely because it arrived as part of a recent juggernaut. Across the biotechnology industries, stocks have made triple-digit gains in recent months. Those include
Human Genome Sciences
. Shares of bigger biotechnology companies also made gains Thursday:
shares rose 6 1/4, or 5%, to close at 139 1/4 and
issues rose 1 1/4, or 2% to close at 54 3/16.
American Stock Exchange Biotechnology Index
gained 3.76% during the day. The index has surged to 368 from 288 on Nov. 30.
The moves took place on a record-breaking day, where the
flirted with 4,000.
Although Celera shares jumped on the announcement, "the news this morning was minor," said Eric Schmidt, analyst for
, which hasn't done underwriting for Celera. Schmidt rates the stock a buy. "I don't think it impacts their business."
Winton Gibbons, analyst for
William Blair & Co.
, which also hasn't done underwriting for Celera, said the purchase could be helpful because several scientists from Molecular Applications will join the company. Those scientists are in short supply, and Celera needed to make or buy the technology to grow its gene-mapping project, he said. Gibbons rates the stock a strong buy.
A spokeswoman for Celera, Heather Kowalski, declined to comment on the stock's move Thursday.
The company seeks to build a database of information about genomes and related medical information. As such, it is in a race with the U.S. government.
"They don't have to win that race to be a successful company," Schmidt said. "Celera will benefit by offering access to the human genome."
The company's current project will be a blueprint, Schmidt said, predicting demand for far more detailed maps in the future.
Small investors may understand that concept better than the Wall Street giants, Gibbons said.
The stock run this week has come from retail buyers, including those who read recent articles in
The New York Times
mentioning the company, he said. While small trades drove the price from 40 to 70, institutional buyers pushed it up to around 110. Now, Gibbons said, the little guys are back in the stock.
"There are enough institutions that don't get the story," Gibbons said. Eventually, though, "they start realizing it's not a one-act company."
Harold Bowen, chairman of money manager
of Atlanta, which owns around 2 1/2% of the company's stock, said he bought Celera shares as a way to invest in biotechnology stocks without taking a risk on the fortunes of one scientific theory.
Celera "will be a reference source for the biotech industry, drug companies," he said. The stock may be popular because "it's a brand new industry and you don't have many ways to participate."
The sector's recent performance has surprised analysts, for better and for worse.
"In terms of volatility and performance, the only thing I'd compare it to is the Internet," Schmidt said.