Securities analysts watching new investors flocking to thebiotechnology sector are beginning to believe that the market'sappetite for biotech stock offerings is far from sated. That'sgood news for the companies that filed for public offerings inFebruary.

There were at least eight of them. Based on Wednesday'sclosing stock prices, these offerings would raise a total of $382million, close to the total of $453 million raised in all of 1990.Companies filing included Regeneron's initial public offeringand secondary offerings by Gensia Pharmaceuticals Inc.,ImmunoGen Inc., The Liposome Co., Chiron Corp., Xoma Corp.,California Biotechnology Inc., and Synergen Inc.

How much more can the market absorb? Lindsay Rosenwald ofD.H. Blair & Co. in New York sees "a lot of demand and verylittle supply," indicating that the market can absorb anyprospective offerings.

Others share that view. "There's a huge investment communitywhich has never owned a biotech stock," said Robert Kupor, abiotech analyst at Kidder Peabody in New York. These investorsnow believe they need a stock from the hottest sector of 1990in their portfolios, said Kupor.

Many of these investors are naive, according to John Kaweske,who manages the $280 million Financial Health SciencesPortfolio of Denver. They don't know biotech, but have beendrawn to the sector by the upward momentum in stock pricesand earnings.

These investors would be the first to get out of biotech stocks ifthere was a market correction, making short-term prices morevolatile. But "the longer-term outlook is still outstanding for theindustry," Kaweske said. He expects total market capitalizationof the 20 major biotech stocks to triple over the next two tothree years to $42 billion from its current level of $14 billion. -- Karen Bernstein

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