It seems that investors are still optimistic on the returns that new biotech firms can bring. A new report from PricewaterhouseCoopers and the National Venture Capital Association says that venture capital investments in biotech increased 22% to $4.7 billion in 446 deals.
The report, called the MoneyTree Report, said that the life sciences sector accounted for 27% of all venture capital dollars spent nationally in 2011, leading an overall 22% increase in venture capital spending compared to 2010 (via The Boston Globe).
Partner at Polaris Venture Partners Alan Crane told The Boston Globe that the large inflows of venture capital into biotech firms represents "a maturation of some promising companies that are now at the stage where they can attract significant dollars."
But Crane also said that early stage biotech firms were having difficulty attracting funding.
"That's a concern," he said, "because those young companies, just emerging from university labs, are the lifeblood of the industry."
Business section: Investing ideas
Despite concern over the youngest companies, these numbers indicate that investors are clearly excited about the prospects of biotech. Will this optimism extend to publicly traded companies?
For a look at the biotech stocks with the most investor optimism, we ran a screen on the industry for stocks rallying above their 20-day, 50-day, and 200-day moving averages for those with the greatest net institutional purchases over the current quarter.
List sorted by net institutional purchases as a percent of share float. (Click here to access free, interactive tools to analyze these ideas.)
2. Bacterin International Holdings
3. Infinity Pharmaceuticals: Engages in the discovery and development of medicines for the treatment of cancer and other conditions in the United States. Market cap of $264.67M. The stock is currently trading 11.22% above its 20-day moving average, 12.80% above its 50-day MA, and 29.89% above its 200-day MA. Net institutional shares purchased over the current quarter at 982.8K, which is 7.42% of the company's 13.25M share float.
4. Seattle Genetics
5. Achillion Pharmaceuticals
6. Idenix Pharmaceuticals
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Alexander Crawford does not own any of the shares mentioned above. Institutional data sourced from Fidelity.
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