San Diego-based ResMed Inc. said it has no explanation for the recent 17.53 percent drop in company shares.
But analysts said there is no reason to sound the alarm, saying the maker of medical products to treat sleep-disordered breathing has been caught in the downdraft of the entire biotech sector.
The announcement follows an inquiry by the New York Stock Exchange, where the stock is trading.
ResMed stock closed at $60 on March 14, down $12.75 from the previous day. ResMed shares recovered quickly, closing at $66.50 on March 15.
“The decline was consistent with everything we have seen in the biotech and medical technology sector,” said Charles Engelberg, a financial analyst at AmeriCal Securities in San Francisco. “It’s consistent with the performance of its peer group.”
On March 14, the Nasdaq composite index tumbled a record 13 percent as investors sold shares in most biotechnology firms following a statement that the United States and Great Britain agreed data discovered by the mapping of human genes should be made public.
Investors sold shares in most biotechnology companies based on fears that companies involved in genetic mapping will not be allowed to sell genetic data to drugmakers and scientists, analysts speculated.
Bloomberg News, however, reported investors who specialize in tracking biotechnology stocks said the statements didn’t represent a change in government policy nor posed any threat to the biotechnology industry.
On March 15, the Nasdaq Biotechnology Index of 199 stocks gained 5.7 percent in early trading, led by Amgen Inc., Immunex Corp. and Biogen Inc., Bloomberg News reported.
Still, stocks of Celera Genomics Corp., a private company in Rockville, Md. which is trying to map the human genome more quickly than the publicly funded Human Genome Project, and other gene-mapping stocks, remained down on March 15.
On March 16, the Nasdaq was down 125 points again, or 2.72 percent at 4,455. That represented a 10 percent slide from the March 10 high of 5,048.62 after four sessions of stiff selling, Reuters reported.
“We are seeing right now a sector rotation out of new economy stocks (Nasdaq) into old economy stocks (Dow Jones industrials),” said Bud Leedom, publisher of the San Diego Stock Report. “There are a lot of compelling reasons to love high-tech stocks. The money flow is dictating what’s happening in the market. A lot of investors go to blue chip because that’s where the trend is.”
