By Lisa Morgenthaler
TheStreet.com
Remember the commotion at the White House on June 26, when scientists celebrated the completion of decoding the human genome?
Have you noticed that despite the much fanfare, you haven't actually seen the human genome? The reason for this was that he was not ready in time. But on Monday
Soon, the journal "Science" will present it in full color online. Almost perfect mapping containing about 99.9% of the genome. The next day, February 16, a paper copy of it will be printed just in time for its presentation at the annual "Science" conference.
I admit, I'm addicted to genome research. But such an event is unprecedented in human history, and it is doubtful that there will be anything like it in the future. Comparing the event to the human landing on the moon instead. The event is so important.
You can look at the rows of A, T, C and G particles that make up your chromosomes - the recipe for you. The difference between you and a monkey is
Only about 2% of these letters. Heck, the difference between you and the person sitting next to you is less than 1% (and if that doesn't scare you, what does?), and you'll probably start hearing about it today or tomorrow because the news boycott ends
And the journalists will be able to start reporting on it.
Will this amazing event with future implications advance biotechnology?
I believe so. Will it send biotech stocks to the moon? Yes, some of them. Celera (NYSE: CRA) will undoubtedly rise because it has done a significant part of the mapping we have seen. According to Celera's count, the number of human genes is
About 40 thousand - much less than 100 thousand, the number they used to tell us at school.
But much debate is expected about how particles assemble these 40 genes. Genes are recipes for creating amino acids and proteins in your body. And as strange as it sounds, these recipes only come in one sequence
seldom. They are often in particle segments called axons, numbering five or six in each gene. Each of these particles will easily combine with other protective particles to create other proteins, thus enabling a situation where 40 thousand genes hold recipes for over a million proteins.
What I don't understand is how ownership of these and other genes will affect biotech stocks once the human genome is revealed. Almost every self-respecting biotech company registered patents on genes - but the first companies were the ones that grabbed the lion's share of the genes.
Human Genome Sciences (NYSE: HGSI) owns about 16 patents on genes. Insight Genomics (NYSE: INCY) claims to have more patents on genes than any other company, including HGSI.
However, Insight has been claiming for some time that it has 140 cloned genes kept in freezers. None of the scientists I know agree with this number, so I'm curious to know how Insight will reconcile this discrepancy. I assume that we will hear from Insight arguments concerning gene particles, and I await with great interest this discussion, as well as other discussions that will follow
Uncovering the human genome.
Suffice it to say that right now, the fundamentals in biotechnology are wonderful and the technicals are strange. I'd be extremely surprised if biotech stocks don't soar next week. We will soon see if I was right.
Still Fruit on Biotechnology Luck may be playing for us all in the next year of the snake upon us. But when it comes to biotechnology, luck has not been on the side of the technical data experts or the fundamental data experts.
Fundamental data expert James Cramer wrote a column on January 5th - and appeared on CNBC on the morning of January 9th - explaining each time that stocks
Biotechnology is on the decline. They didn't come down.
Cramer, God bless him, basically marked the bottom for biotechnology - and by the time he published his column on the subject, the conditions were already ripe
for increases in the sector. Biotechnology (the best-performing sector on the Nasdaq last year) took a hit in the first week of January, when investors realized profits they chose not to realize for tax reasons in 2000.
In any case, the sales in the first week of January, aided by the court decision in favor of Amgen (NYSE AMGN) and several conference calls held by brokers, led to an increase of more than 30% from the low prices of January 8 to the prices
The record of the 30th of January.
(Under the heading "I was wrong", the court's ruling from last month in the case of Amgen and Transkaryotic Therapies (NYSE: TKTX) calmed investors' fears about generic biotech drugs. I believed
that Transkaryotic is expected to win in court, but I did not risk predicting the outcome of the trial because the odds were in Amgen's favor. Furthermore, I still believe that Transkaryotic may win the appeal, which is expected
to have far-reaching implications for the biotechnology sector. But that's already the story of next year).
An email I received following my confrontation with Kramer prompted a follow-up column on January 12th. Reader Mark Gilman is a data expert kind of guy
technicalities, and he argued that justice was leaning on Cramer's side. He also claimed that the biotechnology index of the American Stock Exchange (BTK) will jump to a level of 630 points around January 16. He didn't jump.
However, to do Mark Tzedek justice, I will point out that the index did reach a level of 630 points on January 23, and even rose to a new record of 667 points a week later. But Mark also predicted that "the index will further decrease to the level of 380
points, and that a level of 300 points is expected in the last week of January."
not. It did not go down to this level at the time, I wrote: "I believe that biotechnology will fall after the gains because the Nasdaq Biotechnology Index jumped by 15% and the Biotechnology Index of
The American stock market rose by 20% compared to its level in the middle of Monday's trading...
This is a fairly justified swing, and I foresee a small correction in order to align.
This puts the BTK index at 578 points, which makes it hard for me to believe that
It will drop to 300 points by January 31st. Days will tell... me
I believe that the Nasdaq will register real gains after it becomes clear that the reporting season was not a disaster, and after the Federal Bank lowers the interest rate for the second time (the old law of "two steps back and one step forward"). I do not believe that biotechnology will not benefit from the tide. But pharmaceutical stocks have performed very well over the past 10 months and I think that for now we can forget about them."
Well, I was right about biotech, I was wrong about Nasdaq, and I was partially successful about pharmaceutical stocks. The Amex Pharmaceutical Stock Index is up 4% since the column was published, not a bad result, but it is a tiny fluctuation compared to the fluctuation in biotech stocks. I believed that the effect of the millennium bug would be A more central issue than it used to be (the fact that people accumulated drugs before
year due to concerns about the millennium bug, it was expected to make it difficult for the pharmaceutical companies to report in the fourth quarter better results than those of the corresponding quarter last year).
Good. Following my second column, other readers sent me e-mails claiming that Mr. Gilman is nothing but a bear, and that a drop in the BTK index to 450 points is a foregone conclusion.
I have to tell you, I wouldn't count on it right now, guys. Maybe later in the spring when the status of technology stocks recovers and the money starts flowing in that direction. But not right now, thanks to the unveiling of the human genome next week.
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