Investors scour biotechs in search of the next big payoff

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With investors cashing in on Genzyme's buyout investors are scouring the biotech landscape for new developers to back in hopes of making similar returns. Dow Jones polled a list of analysts, and some concluded that the mid-cap biotech looked promising.

Chris Raymond, an analyst at Robert W. Baird & Co., is focusing on BioMarin, Alexion, Human Genome Sciences and Dendreon. "For the typical fundamental health-care specialist investor, you usually pay for growth," he says. "And the highest growth opportunity lies in the mid-cap space." But the big names in biotech are disappearing fast.

"A lot of bellwether names are getting picked off one by one," Raymond said. "There are pretty slim pickings in biotech. Beneficiaries in recent history and going forward will be midcap companies in very early stages of their growth trajectory."

"If you're a health-care fund and you have to reinvest, then some of these smaller biotech companies naturally could benefit," Rajiv Kaul, a fund manager of Fidelity's Select Biotechnology Portfolio, tells Dow Jones. "This deal forces you to look for new opportunities, and there are many companies with valuations that aren't too bad."

- here's the article from Dow Jones

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