Anthrax scares boost biotech shares

Many Americans are stocking up on anthrax treatments

The shares of many biotechnology companies have risen sharply over the past week in response to the growing fear of bioterrorism in the United States.

Four people have now been diagnosed with anthrax after a series of letters contaminated with anthrax spores were sent to offices.

The expectation is that governments will now increase spending on products and services involved in the detection of biological agents and vaccines against them.

The UK and French governments have already announced new measures in response to concerns over events in the US.

This increased spending and investment makes biotechnology stocks attractive to investors.

Future investment

One such company is Cepheid, a company based in Sunnyvale, California, which develops portable equipment for detecting anthrax spores.

Its shares rose 130% last week, and were up 12% again on Monday, but biotechnology stocks are notoriously volatile.

Jim McCamant runs a medical technology stock newsletter.

He says that Cepheid has been particularly attractive as it is one of the few companies that is making or developing new diagnostic tests which could be useful in a bioterrorism situation.

"I think that when you get into other areas, the vaccine areas and new antibiotics, those are both areas where there is going to be more money spent in the next few years and there are some interesting companies," he said.