If any proof was needed that the public offering window isstill open, Cor Therapeutics Inc. provided it on Tuesday when itannounced plans for an offering of about 2 million shares ofstock.
The proposed offering comes just three months after the SouthSan Francisco, Calif., company raised $15 million in an initialpublic offering priced at $7.50. Now, with its stock up 117percent for the quarter at $16.25, Cor (NASDAQ:CORR) couldraise another $32 million or so.
BioWorld's quarterly stock review found that the 11 companiesthat completed IPOs in the quarter ended Sept. 30 didextremely well. As a portfolio, the group closed the quarter 63percent over IPO prices.
The BioWorld sector rebounded from its 9 percent decline inthe second quarter to post a 35 percent gain.
Among other market indicators, medical and biotechnologystocks regained market leadership among Dow Jones industrygroups, gaining 27 percent.
By comparison, the NASDAQ-composite Index closed thequarter up 11 percent, while the Dow Jones Industrial Averagerose 2.8 percent and Standard & Poor's 500-stock Index rose3.6 percent.
Immune Response Corp. (NASDAQ:IMNR) was the winner amongthe non-penny stocks, closing up 196 percent at $32.25. Themost dramatic gains for the company, which recently filed fora 1.3 million-share secondary offering, came after Robertson,Stephens & Co. analyst Mark Simon in late August reiterated anaggressive "buy" on the stock. The San Diego company has akilled HIV virus AIDS therapeutic vaccine in Phase II/III trials.
Enzo Biochem Inc. stock (AMEX:ENZ) posted the largestpercentage gain, rising 236 percent to close at $1.88. TheFarmingdale, N.Y., company announced in August that it wasreorganizing under Chapter 11 of the bankruptcy code as partof a settlement with its bondholders.
The two big losers for the quarter were Xoma Corp.(NASDAQ:XOMA) and Collagen Corp. (NASDAQ:CGEN), which lost,respectively, 34 percent and 29 percent.
Stock of Xoma's rival, Centocor Inc., was up 54 percent for thequarter and rose another $3.25 on Tuesday, closing at $52 afterGoldman, Sachs & Co. analyst Jeffrey Swarz reiterated a "buy"on the stock and raised his estimates on Centocor's earningsfor 1992 and 1993.
Traders said prices seem ripe for some correction.
"Biotech stocks are in a long-term secular trend upward, butthere can be major moves on either side of that trend line,"said Sutro & Co. broker Richard Bock. He told BioWorld thatprices of third-tier stocks -- those companies with productsone to three years away from clinical trials -- could tumble asmuch as 50 percent, with first and second-tier stocks makingsmaller, but still significant, corrections.
"A correction of 30 or even 50 percent wouldn't be abnormal,"said Alex. Brown & Sons broker Michael King. "I'm notpredicting it, but my gut tells me it's overdone."
Three things could cause a reversal, Bock said: a major pieceof bad news from a first-tier company, a rise in interest ratesor a "collapse from its own silliness" as stock prices rise toextreme levels.
Bock said the last scenario was most likely. "The market isdefinitely getting frothy," he said. "I wouldn't give it past thisquarter."
"A lot of unsophisticated people are coming into the market,and you can have indiscriminate selling," said King. "That'swhere opportunities are going to be created."
-- Karen Bernstein BioWorld Staff
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