HGS bonanza whips up excitement in biotech stocks

Back in March, when its stock was trading for a paltry 45 cents a share, Human Genome Sciences was just another biotech cautionary tale; a developer that had failed dramatically to live up to its potential. This week, of course, it's a different story entirely. After nearly quadrupling on Monday after investors got a taste of some completely unexpected lupus data, HGS' stock gained another 14 percent on Tuesday, with analysts calculating the potential blockbuster revenue that Benlysta could bring in.

Reuters points out that the wild roller coaster ride that public biotech companies often put investors on can attract a big crowd when the numbers go up like that. When the data comes up positive, fortunes can be made overnight, especially if the outlook had been bleak.

"If the stock is going to go up 200 percent overnight people are going to start looking at some of the beat up biotech companies and wondering which one is going to be the next one to have that type of dramatic improvement," said Michael Becker, chief executive of MD Becker Partners.

Of course, there's a flip side to that coin, as anyone who ever had shares in a company that posted disappointing data on a lead drug.

- read the analysis from Reuters

ALSO: When it rains it pours. HGS reported that it won a second order for its anthrax drug, sending its stock up again this morning. Report

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