Subject: Biotechs Hit Hard; More Drops Expected 
Date: Published: 11/18/91 (74 lines)
Source:  Wall Street Journal.  Copyright Dow Jones & Co. Inc. 

    OTC Focus:
    Biotechs Hit Hard;
    More Drops Expected
    ----
    By Anne Newman
    Staff Reporter of The Wall Street Journal

    NEW YORK -- Orbiting biotechnology stocks came screeching
 back down into the atmosphere Friday, and investors predict
 that a lot of them will continue to drop toward earth.
    Friday's carnage whacked an average 13% off the value of
 45 biotech stocks tracked by Denise Gilbert of Smith Barney
 Inc. That means the value of these stocks has been slashed
 19% since Tuesday.
    The flameout was so intense that "I think you'll see
 people selling these stocks if they rally," predicts Stephen
 McNally of Nicholas-Applegate Capital Management in San
 Diego.  "People didn't know what they were buying."
    The selling massacre spread across every tier of the young
 industry, from the mere six companies that are profitable
 Amgen, Chiron, Genzyme, Biogen, Immunex and Genentech, which
 is listed on the New York Stock Exchange -- to newly public
 ones with no foreseeable profits.
    Bellwether Amgen skidded 5 1/2 to 52; Chiron tumbled 6 3/4
 to 64 3/4; Genzyme toppled 7 to 44 3/4; and Biogen dove 7 7/8
 to 38 5/8.  Immunex tumbled 6 3/4 to 48, although recently the
 Seattle company has announced plans to begin human testing on
 two separate products.  Genentech dropped 1 3/8 to 33.  Shares
 on the American Stock Exchange tumbled:  Alza fell 4 3/8 to 79
 1/2 and U. S. Bioscience plummeted 8 3/8 to 36 3/4.
    In the over-the-counter market, Synergen plunged an
 additional 8 3/4 to 48 1/2, ending the week nearly 17 points
 lower.  Investors were rattled when the Boulder, Colo.,
 company halted tests of a treatment for leg ulcers because it
 wasn't effective.  Gensia Pharmaceuticals dropped 6 to 33 1/4.
    "It was fairly much of a nightmare," says Amy Foster, who
 trades about 25 biotechnology stocks for Kidder Peabody in
 New York.  "I can't imagine anything worse.  I had sellers in
 every one of these stocks."
    Even one normally "stoic" individual ordered Ms. Foster to
 sell 18,000 shares of Centocor, she says; "he sounded like he
 was gritting his teeth."  Centocor fell 5 to 44 3/4.
    Despite Friday's slaughter, long-term biotech investors
 are still sitting on healthy gains.  Ms. Gilbert's index is up
 107% this year -- although off from its peak 167% gain
 reached Tuesday.  Yet Friday's sell-off rattled small
 investors, suggesting that the recent torrent of dollars
 flowing into biotech mutual funds may be about to subside.
    Maryann Merritt of Wimberley, Texas, a former hospital
 administrator, had planned to invest in a biotech mutual
 fund; so had her veterinarian.  But Saturday morning when she
 took her pets in for a checkup, both people agreed to steer
 clear of the stocks.  "When they fall, they go big time," she
 says.  "It's hard to know if the {stock} prices really reflect
 the underlying value of the company or if it's all fluff."
    Immune Response Corp. 's 44% fall last week underscored Ms. 
 Merritt's fear.  Shares of the Carlsbad, Calif., company began
 the year at 2 7/8 and had soared to 61 3/4 by Tuesday amid
 optimism that a federal advisory panel would endorse the
 company's plans for testing an AIDS vaccine.  But after the
 panel indicated that more extensive testing would be
 required, Immune Response's stock slid 27 points over the
 next three days.  Both Immune Response's collapse and a
 separate midweek setback for more seasoned Synergen are
 credited with unleashing Friday's bloodbath in biotechnology
 stocks.

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