MARKET REPORT : Hello Dolly as biotechs dance back into the spotlight

Biotech is back. After a share price meltdown in the second half of last year the sector has returned to favour with investors, helped by anticipation of good news flow and an upturn in the US biotech market.

According to Dr Erling Refsum at Japanese broker Yamaichi, many large financial institutions now take the view that they must have some exposure on fundamental grounds to the UK biotech sector - the second-largest of its kind in the world after the US.

In a 69-page review just sent out to clients, he estimates that the underlying intellectual assets in the sector are growing at an average of between 30-50 per cent a year while the number of quoted companies is now large enough for a portfolio approach to reduce individual company risk.

Certainly sentiment has been helped by a clutch of upbeat announcements, the most high-profile of which came this week from PPL Therapeutics, responsible for technology which created Dolly the lamb, the world's first cloned mammal. The shares soared another 67.5p to 455p, for a two-day gain of 36 per cent.

This follows news last week that Proteus had successfully developed a speedier test for detecting BSE with the blessing of the Irish government. Shares in Proteus, 7p higher yesterday at 87.5p, have nearly tripled since the breakthrough was reported.

Cantab Pharmaceuticals benefited from the institutional buying, rising 2.5p to 867.5p as the Prudential emerged as the owner of 3.81 per cent of the shares. In its report Yamaichi notes Cantab's "stunning" genital warts trial results while the emergence of drugs giants SmithKline Beecham and Pfizer as partners validates the technology. Also touching new highs yesterday was BTG, up 16.5p to 591.5p, fuelled in part by takeover hopes. The UK government's golden share in the world's leading technology transfer company expires next month.

AIM-listed PolyMASC Pharmaceuticals advanced 10p to 133.5 after posting a maiden loss of pounds 1.1m on sales of pounds 117,000.

Recent speculative buying has also been seen in blood products group Haemocell, whose shares have come off their all-time 3p low. There is talk that the stock, unchanged at 5.5p, could hit 10p soon.

Blue chips followed Wall Street lower with the FTSE 100 index closing at 4,344.7, up 13.6, but 13 points below the day's best showing.

The main casualty was NatWest Bank, down 36p to 776.5p, as analysts rushed to trim their forecasts after a disappointing set of final results. The main concerns were rising costs and a lack of news about a share buy-back. Some switching out of NatWest was also seen, with Barclays the main beneficiary, up 26p at 1,122p.

Further consideration of Dresdner Kleinwort Benson's positive review of retailers pushed Marks & Spencer and Next to the top of the list of best-performing blue chips. M&S advanced 14.5p to 503p, closely followed by Next, 16p better at 609.5p.

Among the laggards, sell advice from UBS, BZW and Dresdner Kleinwort Benson was enough to wipe out all of Monday's gains in Thorn, down 13.5p at 189.5p. EMI, its former stablemate, had a volatile session, dipping 36p in an immediate knee-jerk response to weak nine-month results. But the shares recovered to close a net 4.5p higher at 1,197.5p as the negative impact of currency factors was discounted.

Also in the doghouse was Dalgety, off 6p at 332.5p as HSBC James Capel lowered its recommendation to hold, but rival food producer Hillsdown Holdings fared better, adding a penny to 186p ahead of next week's results as NatWest highlighted expectations for double-digit earnings growth and a 7 per cent yield. Pace Micro hit a new low of 157p, down 3p. Analysts hope that a rare speech by BSkyB supremo Sam Chisholm at a cable conference on Thursday may also provide long-awaited news that Pace has won the contract to make up to 250,000 digital set-top boxes.

A profits warning from zips maker SEP sent the shares crashing 10.25p to 26p for the day's biggest single fall.

Shares in Motion Media, the Ofex-listed video phone maker, paused for breath, slipping 10p to 270p. The shares have been stellar performers in recent weeks on hopes of a big video phone deal with BT that would transform the company.

MM is also exhibiting its video phone, launched last November, at the Cebit trade fair in Hanover next month when an agreement with Deutsche Telekom may also be unveiled.

Taking Stock

r The latest top-of-the-bull-market signal comes from ShareLink, which says the level of inquiries for the forthcoming Birmingham City flotation has been "overwhelming". Queues formed yesterday outside the execution-only broker's Birmingham headquarters as fans rushed to beat this morning's 10 o'clock deadline for applications. This despite the Blues' miserable form on the football pitch and reports that club captain Steve Bruce is poised to take over from Trevor Francis as manager after dealings in the shares begins on AIM on 7 March.

r William Sinclair, the garden products group, flowered as interim pre- tax profits came in at pounds 2.24m (pounds 1.76m). The shares rose 15p to 221.5p, their best level for over three years.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
filmPoldark production team claims innocence of viewers' ab frenzy
Life and Style
Google marks the 81st anniversary of the Loch Ness Monster's most famous photograph
techIt's the 81st anniversary of THAT iconic photograph
News
Katie Hopkins makes a living out of courting controversy
people
News
General Election
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

Ashdown Group: Head of Client Services - City of London, Old Street

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders