Is the biotech bubble back?

The biotech sector proved to be last year's darling of irrational exuberance, seeing a whole slate of small-cap companies surge in value. Over the last few months, though, swelling hopes gave way to a painful correction, especially after a series of clinical-stage disasters. Now that Merck ($MRK) saw fit to buy Idenix and its hep C drugs for a 239% premium, though, biotech is back--for now. "As the yields on dividend stocks begin to dry up, risk stocks look more attractive, and after the biotech beat down, I think these stocks are a great opportunity," Ron Garren, an oncologist and editor of BioTechInsight.com, told Investor's Business Daily. "There has been an incredible amount of work in immunotherapies and cancer. Also, there are big opportunities involved in fatal diseases that need therapies." Story