Playing the High-Stakes Biotech Game.

Shares of biotechnology corporations have dropped, after the much expected Yankee Society of Clinical Oncologists meeting in early June in New Orleans. This sector has been on a roll ever since Genentech ( NYSE : DNA ) vaulted 45% on May nineteen, 2003 following positive stories from Phase III trials of Avastin in colorectal cancer patients. Is the current correction an excellent time to fish or cut-bait? Before you decide to dump or load up on biotech stocks, it is worthwhile to study the 3Cs driving this sector : Cancer, Cycle-time, and Consolidation.

A hot-bed of activity, cancer research has attracted lot of attention. Tarceva, an experimental drug developed by OSI Pharmaceuticals ( Naz : OSIP ) and approved to Genentech and Roche ( ROG.

ImClones ( Naz : IMCL ) Erbitux, that's already licensed for treating cancer of the colon, is another focused drug that is in the spotlight. Biotechnology, a '90s jargon, popularly conjures up rather ominous pictures of gene-tinkering. Yet manipulating the genetic makeup of plants and animals to boost crop yields is some distance from new. Cross-breeding for desired marks like tallness, larger milk yield or sweeter fruits, has been practiced ever since humans took up farming. Also, normal cross-breeding can only be used inside people of the same ( or related ) species - further limiting its ability to reinforce or change food quality. What are the advantages of biotechnology? And are they, really? Biotechnology can dramatically lessen the time and effort needed to enhance crops and cattle. The root of modern food biotechnology relies on the molecule deoxyribonucleic acid or DNA, the genetic material of all living cells. It is contained in the chromosomes ( threadlike structures ) within the cell nucleus. There are 2 exchange-traded funds ( ETFs ) that target the biotechnology industry as well : iShares NDX Biotechnology ( AMEX : IBB ) and Biotech HOLDRs ( AMEX : BBH ). The iShares are built to track the NDX Biotechnology Index and include over a hundred biotech corporations that trade on the Naz . As of March 31, 2004, the top ten holdings in the iShares had a mixed weighting of approximately 36% with Amgen on its own having a 17% weighting.