Shares of Illumina Inc. and Edwards Lifesciences hit new 52-week highs Wednesday, as a Cowen & Co. analyst said a potential increase in the National Institute of Health's fiscal 2009 budget would be a boon for life science tools makers.
The U.S. House of Representatives Appropriations Committee is considering this week a proposal to increase the NIH budget by $1.2 billion next year.
The new proposal would boost the budget by at least 4 percent from 2008's $28.9 billion budget _ more than President Bush proposed in the first quarter with his NIH budget of $29.5 billion, which some had argued didn't even make up for inflation.
"While this proposal is at relatively early stage _ markup of the bill is scheduled for Thursday _ this development should be viewed as a potential positive catalyst for the Life Science Tools group," analyst Doug Schenkel said in a note to investors.
He said that while the budget increase would likely drive demand for consumables, he also thinks it would boost demand for instruments.
Irvine, Calif.-based Edwards Lifesciences, which makes heart valves, stents and surgical clamps, rose $1.22, or 2 percent, to $62.88 in late afternoon trading, having earlier reached a new year-high of $63.49. San Diego-based Illumina, which makes gene sequencing products, climbed $1.87, or 2.3 percent, to $84.56, and topped out at $85.34 earlier in the session.
Most stocks in the life sciences sector rose Wednesday, with Parexel, Covance, Waters and Pharmaceutical Product Development all up more than 2 percent before the close.
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