Updated from 12:21 p.m. EDT

The biotech sector was already in rally mode in recent weeks, but the decidedly upbeat news released at this year's meeting of the American Society of Clinical Oncology provided an additional lift to the group on Monday.

Many biotech stocks finished off their highs of the session, as the group fell victim to the same late-day sluggishness that hit the broader market, but on the whole, the sector was still positive.

Vion Pharmaceuticals ( VION), Genentech ( DNA) and Millennium Pharmaceuticals ( MLNM) were among the names climbing to start the week, but one of the biggest winners of the day was ImClone Systems ( IMCLE).

ImClone's European partner, German drugmaker Merck KgaA, released study results at ASCO over the weekend for the experimental cancer drug Erbitux, showing that the drug, when combined with chemotherapy, shrank tumors in patients with late-stage colon cancer.

The data from the Merck study are an almost exact repeat of data previously gathered by ImClone in 2001. The legitimacy of the earlier ImClone data and the way it was gathered was questioned by the Food and Drug Administration. The agency rejected the company's original application for Erbitux in December 2001.

Even though the results were essentially as expected , investors rushed to buy shares of ImClone, which saw its stock stumble last year amid an insider trading scandal that led to the resignation of then-CEO Sam Waksal.

ImClone added $5, or nearly 18%, to $33.50. The stock ended below its high of the day, but still shattered the old 52-week high of $28.68. Since the start of the year, the company's share price has more than tripled. Volume was nearly 10 times the normal level.

The Amex Biotech Index closed with a gain of 1.3%, and the Nasdaq Biotech Index climbed 0.7%.

Continuing the Run

The biotech stocks have been enjoying solid gains lately, thanks to anticipation before the ASCO meeting, strong earnings from the group, short-covering and the belief that the FDA is trying to get new drugs approved faster.

(Columnist Adam Feuerstein attended this year's ASCO meeting, and his coverage appeared on both TheStreet.com and RealMoney.com.)

Vion rose $1.06 to close at $2.30, a gain of 85%. Genentech gained 7% to $66.73, and Millennium was higher by 3% at $15.97.

As for Genentech, analysts are so far positive on the company's prospective cancer drug Avastin , but the experts are torn about the stock's valuation.

Last week, CIBC World Markets downgraded Genentech , saying its stock price has run up too much. On Monday, RW Baird cut the stock to neutral from outperform, but did raise its price target to $60 from $50.

UBS PaineWebber took a different approach, raising its price target on Genentech to $100 from $75.

On Street Insight, a sister site to TheStreet.com, contributors were considering the effects of the ASCO meeting and the current environment for biotech stocks.

Jim Gulbrandsen, the managing partner and founder of Silvertree Management Group and general partner of Silvertree Equity Partners I, a hedge fund based outside San Francisco, wrote that "'too far too fast' is definitely in my mind as it relates to biotech."

He also wrote that "there could be some digestion in coming days, but I contend that we are in the top of the 4th inning. The momentum crowd has been jumping all over the group, but for the first time in years I believe the mutual funds will have to pay attention to biotech. Whether they should go higher or not, they will. Volatility will set in very soon, but I will be buying significant selloffs, including the predictable ASCO selloff (too predictable?)."

Sally Yanchus, an analyst and consultant for health care clients, and also a contributor to Street Insight, wrote that she was "less inclined to believe that the biotech group will experience a harsh selloff post-ASCO" for two reasons.

"The FDA's new position on the drug-approval process will result in an acceleration in approval times, which is arguably the single biggest fundamental positive for pharma and biotech companies," she wrote.

The second issue, she wrote, is simple supply and demand. " T here are few sectors other than biotech to put growth money, and this I believe could continue to drive valuations into the stratosphere," Yanchus contended. "For this reason, I would not be aggressively short anything yet."

Few Left Behind

Abgenix ( ABGX) was one of the notable biotech losers, dropping 9% to $9.71, on word that while the company's cancer drug, ABX-EGF, was effective in shrinking tumors in patients with advanced colon cancer, the scope of the drug's efficacy may fall short of Wall Street's elevated expectations .

Amgen ( AMGN) dropped almost 2%, and Genzyme ( GENZ) fell nearly 5%.

Other stocks gaining ground included OSI Pharmaceuticals ( OSIP), up 7% to $28.25; Dendreon ( DNDN), climbing 5% to $6.58; Antigenics ( AGEN), higher by 9% to $13.37; and Protein Design Labs ( PDLI), better by 9% at $15.46.

Ribapharm ( RNA), Affymetrix ( AFFX) and Ilex Oncology ( ILXO) also were among the advancing issues.