Washington

A clutch of US biotech companies with genomics-based business plans saw their stock prices rise dramatically in heavy trading in the final weeks of December. Some reached almost ten times their initial value.

According to biotech analyst Steven Burrill of San Francisco, the rise is the result of a “confluence” of factors — including the completion of human chromosome 22, the sequencing of the first billion base pairs of the human genome and the impending completion of the Drosophila genome.

Celera Genomics Inc., which is competing with the international Human Genome Project to sequence the human genome, rose to $186 a share by the beginning of this week, more than three times its price at the beginning of December.

Paul Boni, an analyst with Punk, Ziegel and Co. in New York, suggests that the sequencing race may have helped to raise both Celera's profile and its price. “Who wins this race is largely irrelevant,” he says, adding that it has boosted the fortunes of other genomics database companies. Incyte Pharmaceuticals Inc., of Palo Alto, California, has seen its price climb from $12 a share in November to $89 by 3 January.

David Gardner, co-founder of ‘The Motley Fool’, an online investment-strategies site, says that the addition of Celera's stock to their portfolio — the site purchased the stock at $79 in mid-December — was “an obvious catalyst” in its rise.

Eric Schmidt, a biotech analyst with SG Cowen Securities in New York, says that Pfizer's decision in November to subscribe to genome databases owned by Celera and Incyte could also have triggered the increase.

Schmidt points out that Celera and Incyte differ from traditional biotech companies in that their futures do not depend on getting a compound through clinical trials, but on supplying the “picks and shovels” for gene prospecting.

Several companies that use genomics to develop potential tests or therapies have also done well. These include Human Genome Sciences Inc. of Rockville, Maryland, whose shares rose from around $40 in August to almost $145 last week. For long-term success, however, “they will have to come up with a blockbuster”, says Schmidt.