ROCHE: A Heavy Weight to give Substance to your Portfolio

BOSTON (AFX) -- Biotechnology stocks opened the year on a modestly upbeat
note Friday, with shares of Orchid BioSciences continuing to soar amid hopes the
small biotech firm will benefit from concerns about mad-cow disease.
The Amex Biotechnology Index increased 0.8 percent to 494.01, and the Nasdaq
Biotechnology Index rose 0.9 percent to 730.65. Both biotechnology indexes rose
about 45 percent in 2003, fueled by optimism about new biotech therapies and
resurging investor confidence.
But industry watchers caution that biotech investors shouldn't bank on getting
the same, broad-based gains in 2004.
"It would be hard to expect a repeat performance, at least for the overall
sector," said Carolyn Pratt, executive vice president with RRD International
Inc., a firm that specializes in helping companies with drug development.
"Specific companies, though, could do well if they are successful at meeting
their clinical, regulatory and sales milestones."
Pratt said investors will be focusing on drug sales in the new year.
Traditionally, biotech stocks have been driven by scientific promise rather than
product sales. But as the industry matures and biotech firms have an increasing
number of therapies on the market, the emphasis is expected to shift toward
product sales, Pratt said.
New cancer therapies, including Millennium Pharmaceuticals' Velcade, will
likely be among the drugs at the center of attention in 2004. And Genentech's
Avastin, an anti-cancer drug expected to win regulatory clearance before the end
of March, is sure to be one of the most talked about biotech therapies of 2004.
Hopes about Avastin's cancer-fighting potential contributed to 2003's rally in
biotech stocks.
Shares of Millennium tacked on 40 cents, or 2.1 percent, to $19.05, after
earlier touching a 52-week high of $19.20. Shares of No. 2 biotech firm
Genentech moved up $1.09 to $94.66.
Leading the day's advancers, shares of Orchid BioSciences gained 40 cents, or
21.6 percent, to $2.25. Shares of the small biotech firm have been on the
upswing recently because of optimism that Orchid might be able to capitalize on
the scare about mad-cow disease. Orchid provides genetic testing that's now used
in determining how susceptible sheep are to scrapie, a disease that's similar to
mad-cow disease. For the first nine months of 2003, Orchid reported a net loss
of $20.2 million, or 34 cents per share.
Elsewhere, shares of No. 1 biotech firm Amgen rose 71 cents to $62.50, and
shares of No. 3 biotech firm Biogen Idec added 52 cents to $37.22.
Among the day's biggest decliners, shares of Ciphergen sank $3.05, or 26.9
percent, to $8.37. The provider of products and services used in biomedical
research warned its fourth-quarter revenue will be below earlier expectations
because of a slowdown in sales of the company's ProteinChip system.
In the pharmaceutical sector, shares of Eli Lilly increased $1.38, or 2
percent, to $71.71 ahead of the company's financial forecast. The drugmaker on
Monday morning is scheduled to release its financial projections for 2004. Eli
Lilly is expected to earn $2.92 per share for 2004, according to the average
estimate of analysts polled by Reuters Research.
The Amex Pharmaceutical Index moved up 1 percent to 338.93.
Pharmaceutical stocks lagged the strong performance of the broader market
indexes in 2003, but a number of analysts have been suggesting that the stocks
could recover in 2004 as investors seek out high dividend yields.
Shares of Bristol-Myers Squibb advanced 76 cents, or 2.7 percent, to $29.36,
and shares of Dow component Merck & Co. moved up 83 cents to $47.03.
Bristol-Myers and Merck have among the highest dividend yields in the industry.
This story was supplied by CBSMarketWatch. For further information see
www.cbsmarketwatch.com.