Biotechnology companies could feel impact of nearly flat National Institutes of Health funding

Several biotechnology companies which partly rely on federal grants will see few increases in 2008, after a federal funding bill raised the National Institutes of Health budget by less than 1 percent.

President Bush signed a $555 billion appropriations bill for the 2008 federal budget Thursday, which set aside about $29.5 billion for the NIH. UBS Research analyst Derik De Bruin, in a note to investors Friday, said the slight increase fell short according to several measures.

Congress initially asked for a 3.6 percent increase for the NIH; meanwhile the rate of inflation for biomedical research increased by about 3.7 percent. UBS had expected a 2.3 percent increase in funding.

With the exception of HIV/AIDS research and relief funding, most divisions of the NIH were funded at 2007 levels. The companies most likely impacted include Carlsbad, Calif.-based Invitrogen Corp., Netherlands-based Qiagen NV, Norwalk, Conn.-based Applera Corp., Santa Clara, Calif.-based Affymetrix Corp., and San Diego-based Illumina Inc.

Shares of those stocks traded mixed Friday while The American Stock Exchange's biotechnology index fell 5.03 points to close at 792.66. The index tracks several bellwether stocks. The Nasdaq Stock Market's biotechnology index, which covers a broader range of small- and midcap stocks, fell 3.5 points to 843.2.

Here's how several biotechnology stocks performed Friday:

Invitrogen shares slipped 44 cents to close at $92.41.

Qiagen shares fell 60 cents to $21.25.

Applera closed up 41 cents to $34.14.

Affymetrix rose 6 cents to finish at $23.62.

Illumina finished up 50 cents at $60.09.