UPDATE 1-Biotech, genomics stocks slip ahead of new IPOs
(recasts lede, adds details from IPO calendar paragraph 10) By William Borden
NEW YORK, July 31 (Reuters) - A glut of upcoming biotechnology and genomics initial public offerings is weighing on the sector on Monday as investors take profits to put their money into new stocks.
Investors are taking profits from June's rise in biotechs to free up funds to buy upcoming biotechnology initial public offerings, analysts said. The stocks are down only slightly after falling as much as two percent this morning.
"There is a fairly full IPO calendar. People are doing some profit taking on earlier genomics and biotech IPOs and redeploying it into some of the new IPOs," said Winton Gibbon, analyst at William Blair & Co.
Paul Knight, analyst at Thomas Weisel Partners, described the process as "fratricide.
"They ruin their own. It is a microcosm of money flow," Knight said. Fund managers will buy the biotech and genomic initial public offerings and rotate out after they make money, he said.
"That is being done on top of what has been a fairly sloppy market in general," Gibbon said, noting last Friday's drop in the market.
"What you've seen over the course of the past six months is the highest fliers have been the fastest fallers," SG Cowen analyst Bill Tanner said. "They tend to lead on the way up and they tend to be the first to fall." Despite Friday's sell-off in stocks, Tanner said many biotech stocks are still not cheap. That leaves them exposed to declines when investor confidence sags, Tanner said.
The Nasdaq biotech index <.IXB> was down 0.14 percent, or 1.57, at 1128.18, after falling to 1099.42 earlier in the session. Earlier this month the index was approaching 1400, in a rebound from 926.12 at the end of May.
June's rally in biotech and genomics stocks helped spur a calendar full of upcoming initial public offerings to raise funds. Inspire Pharmaceuticals Inc. , Genaissance Pharmaceuticals Inc. , Rosetta Inpharmatics Inc. and !!!!!Germany's Lion Bioscience AG!!!!!!! are among the U.S. IPOs scheduled this week. Company specific events also cut some stocks.
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