This week Wood Mackenzie, an Edinburgh-based research and consulting firm, reviews recent trends in biotechnology stocks.

The Nasdaq biotechnology index experienced a choppy ride — overlying a general, downward trend — during May and June. The index lost more than 4% of its value, although it is still up nearly 2% on the start of 2007. By contrast, broader market indices made modest gains during the same period.

As it is weighted according to market capitalization, the biotechnology index is closely tied to the fortunes of its largest component company, Amgen. The Californian company has suffered from concerns in the United States over the safety of erythropoiesis-stimulating agents in cancer treatment, of which Amgen has two: Epogen and Aranesp. Investors reacted badly to the threat to Amgen's largest franchise, which accounts for about half of the company's sales. The company's share price fell, and was down nearly 12% over the period (see Nature 447, 899; 2007).

Other companies in the cancer market have had misfortunes, too. In early May, the US Food and Drug Administration (FDA) said it would require more data before approving a therapeutic prostate cancer vaccine, Provenge, under development by Seattle-based Dendreon. Its shares fell more than 60% on the news, wiping out gains made in March. And in early June, the FDA temporarily halted all clinical trials for the ovarian cancer drug candidate Telcyta, on safety grounds. Shares of its developer, Telik of Palo Alto, California, lost almost half their value on the news.

Summer is customarily a slow time for stock markets in general, and biotechnology shares in particular. This year, Amgen's misfortunes are unsettling investors, with many of the smaller companies in the biotech sector involuntarily joining in the slide.