This week Wood Mackenzie, an Edinburgh-based research and consulting firm, reviews recent trends in biotechnology stocks.

Boosted by a better investment sentiment and a clutch of eye-catching acquisitions, the Nasdaq biotechnology index is up 11.5% over the past eight weeks — but is still less than 4% up from where it started the year.

Celgene of New Jersey was a prime mover in the biotech index, with its shares up almost a third after it reported strong sales of the anticancer drug Revlimid, as well as news that the company is to be listed on Standard & Poor's 500 index.

On 2 October, Californian drug maker Gilead agreed to buy Colorado cardiovascular company Myogen for $2.5 billion, impressed by strong clinical results for Ambrisentan, a treatment for pulmonary arterial hypertension. Myogen's shares jumped 47% on the news. And later that month, Stiefel Laboratories of Florida agreed to pay $640 million for Connetics, a Californian dermatology company, whose share value rose 46% on the news.

Then, in perhaps the most prominent of the purchases, Merck said it would pay $1.2 billion for Californian RNA interference company Sirna Therapeutics. Sirna is attempting to develop an RNAi drug to treat age-related macular degeneration. Sirna's shares almost doubled on the announcement.

And on 6 November, Illinois-based Abbott Laboratories bought Kos Pharmaceuticals of New Jersey for $3.7 billion, with an eye to its cholesterol-lowering drug Niaspan. Kos's shares were up by more than half on the news. Like the other deals, this served to remind the markets that drug companies are ready and willing to pay a healthy premium to get their hands on novel biotech products.