Biotech stocks start out on right foot in January, says Burrill report

While 2006 was a year that many of the larger biotechnology companies would prefer to forget, the New Year has started out on a positive note for these bell-weather companies. The Burrill Biotech Select Index, which slipped almost 14% in value by the close of 2006, recovered in January finishing up 4.5% by month-end outperforming the Nasdaq, which posted a January gain of 2%, and the Dow Jones just short of that at 1.3%.

Although finishing a hair short of its record high, the Dow was bolstered on the final trading day of January by the Federal Reserve holding interest rates steady and citing a pickup in economic growth but no significant shift in monetary policy for now.

"There were some very impressive gains among biotech's elite companies during January, which helped biotech outperform the general markets during January," said Steven Burrill, chief executive of Burrill & Co, a San Francisco, USA-based global life sciences firm with principal activities in venture capital, merchant banking and media. "With the Fed's holding firm on interest rates, it bodes well for a steady improvement in the fortunes of biotech companies during the year. We saw all Burrill indices performing well this month, something we haven't seen for several months," added Mr Burrill.