Backing Away From Biotechs
The news flow in the biotech sector is beginning to slow down, while safety concerns in the pharmaceutical industry continue to dominate headlines. Standard & Poor's Equity Research downgraded the biotech industry this week to "neutral" from "positive," citing delays in drug filings and increased regulatory scrutiny. The research firm has "concerns over options expensing in second half of 2005" and recommends a more cautious approach to the sector. The American Stock Exchange Pharmaceutical Index (DRG) ended the week up 1.5%, while the Nasdaq Biotechnology Index (NBI) reversed last week's spirited gains with a decline of 2.5%.