US Biotech posts strong third quarter 2010 performance as capital markets go on a tear, says Burrill & Co

Biotech posted its strongest monthly and quarterly performance in several years in what was hailed as the strongest September rally for equities in more than 70 years. The Burrill Biotech Select Index gained 7.8% in the month and 13% in the third quarter. The Dow Jones Industrial Average rose 777 points, or 7.7%, its biggest appreciation during what historically has been a bad month for the index since 1939, and was up 10.3% for the quarter. The Nasdaq Composite Index climbed 12 %for the month and 12.3% for the quarter.

"The significant rise of share values was fueled by an easing of concerns about a double-dip recession as well as hopes for a better economic outlook," said Steven Burrill, chief executive of Burrill & Company, a San Francisco, USA- based life sciences firm with activities in private equity, venture capital, merchant banking and media. Biotech is now up 6% year-to-date and is well positioned for a strong fourth quarter, he noted.

"We did predict at the beginning of the year that the general markets would be choppy and that biotech companies would begin to perform well in the second half of the year. It appears that this scenario is beginning to play out as we enter the final quarter of the year, which is typically one of the industry's best,” he said.