Ringing in the New Year means bidding the holiday season goodbye. Has the slow holiday week boredom gotten to some investors? Several small biotech stocks landed in the investment spotlight this week, one of which was Encysive (NASDAQ:ENCY). It rose about 18% Tuesday, and if you're wondering what exactly changed, the answer is not too much.

An analyst at SG Cowen -- a firm that participated in underwriting a public offering for Encysive earlier this month, as a matter of fact -- initiated coverage on the stock and commented on the outlook for the company, particularly in relation to one of its medications, which is currently in Phase III trials.

That drug, Sitaxsentan, will treat pulmonary hypertension, and the compelling note on that disorder is a $1.5 billion market.

This week, investors grabbed up shares of several other small biotech companies, including Trinity Biotech (NASDAQ:TRIB) and ChromaVision (NASDAQ:CVSN), which gained approval for a 10-minute HIV test and a breast cancer treatment, respectively. These are far more compelling pieces of news, given the fact that these companies products were actually approved.

Meanwhile, we already know that even large, established companies suffer serious setbacks during drug development, even when trials are in the late stages. A few recent discontinued late-stage trials at Merck (NYSE:MRK), including one for diabetes and another for depression, can attest to that.

For investors addicted to speculative stocks (and possibly bored by a fairly slow week in financial news), an analyst initiation might have seemed the perfect prescription, but it seems many investors got too compulsive. Yesterday's news on Encysive was no reason to rush to buy in.

Talk about this story and more with other Fools on the Biotech discussion board.

Alyce Lomax welcomes your feedback at alomax@fool.com.