JJC:    If you want to know which country will walk away with the most gold medals in the Chinese-communist Olympics, you're asking the wrong guy... and also, of course, the angry, pre-empted guy (referring to his 6pm show being replaced by the Olympic coverage over the next two weeks)...

But if you want to know which group of stocks will outperform the rest... the true "equity Olympians"... sans killer smog...  you've come to the right place... so, listen up!...

Right now, I think the best names are coming out of biotech...  in my not-so-humble opinion...

Biotech stocks will continue to deliver!

There are, of course, actual reasons for this.  It's not just stock market hocus-pocus..

Biotech has been the best-performing group of the year, with Cramer-fave Genentech Inc. (DNA) up 45%, since the beginning of the year, thanks to that great takeover bid from Roche.

How about Imclone Systems Inc. (IMCL), up 49%, courtesy of another bid, this time, from Bristol-Myers (BMY)...

And good old Amgen Inc. (AMGN), powering on its own, up 37% so far this year.  Well, no one's made a bid for it, but it be moving... 

I don't think you've missed the move though.  In fact, I think it's the middle innings...  Just about the time when the Mets pull their starters for that weak bullpen...

.  .  .  .  .

There are five reasons why I think biotech is the number one group to own throughout the fall....

First of all... the last time we had a bank crisis in this country, that kept interest rates low... something that makes the big-money guys more willing to pay up for the growth that biotech companies have.

In 1990, biotech companies was the group to own hands down... AMGN leading the charge...  Same deal...  Throw in the fact that we're now in a lower inflation environment, and interest rates are going lower...

Look at the cost of natural gas, oil, grains, copper...  Practically all of the commodities are falling.  I think this is the perfect environment for biotech, since low inflation makes the future earnings of these companies - and those earnings are the reason you'd be buying them - more valuable in real terms.

Second... the democrats are looking still pretty good here.  They adore biotech companies.  For some reason, the democrats have historically hated and despised big pharma, while they are in love with small pharma... they love it... and biotech companies are small pharma.

Third... even though there will always be a slew of newspaper stories whining about the prices of drugs that give terminal cancer patients a few precious months of life... and, while that may knock the stocks down temporarily... we know from the case of Genentech Inc. (DNA), which we recommended right after it got hit with a New York Times hatchet job, that the journalists know nothing and, of course, people are usually willing to pay up for these drugs... and, then, what happened?  We walked right into a huge takeover bid...  Ripped from the headlines?...  Not!...

The Fourth Reason I like this group...  is that the takeovers in biotech have been coming hot and heavy... 

In July alone, there were six proposed deals.  How about this?...  Eli Lilly & Co. (LLY) buying SGX Pharma... $64 million.  Biopharma buying LevPharma... $443 million.  Sanofi-Aventis (SNY) buying... $550 million bid for Acambis...  Bristol-Myers Squibb Co. (BMY) $4.5 billion bid for Imclone (IMCL)...  Roche is looking to buy Genentech Inc. (DNA)...  Forget it!  They'll never get it this cheap... 45% it doesn't own for $44 billion... a price that values the stock at $100 per share...  And though this one doesn't quite fit the biotech mold, it's a marriage of generic drugs... Teva Pharmaceutical (TEVA) is trying to buy Barr Labs (BRL).  That's a real surfeit of deals.  I think there are many more coming.

Finally (the Fifth Reason)...  We like biotech right now, because this fall is usually filled with medical conferences and drug approvals...  

.  .  .  .  .

For all of these reasons, I'm giving you one biotech name every day this week, in honor of performance, not the Olympics... because I believe you'll be cursing yourself, and maybe me, come this autumn, if you don't have some biotech exposure.

So who fits the theme in today's issue?...

Onyx Pharmaceuticals Inc. (ONXX)...  a $2.2 billion biotech company with what seems to be a great cancer franchise.  I think it's looking absolutely right for the kind of foreign takeover that we saw with Roche and Genentech Inc. (DNA), courtesy of the weak dollar, which makes it easier for the Europeans to buy out American companies for much less than they would have a few years ago.  Remember, if the dollar's bottomed, which it has, they get interested...

A template for this theme...  remember, because of the banking crisis, and the fact that the democrats seem poised to seize the White House in November, I say why wait for election day?  We need another October revolution!...

I think any biotech should work, but we want more than just any old biotech...  We want the ones with life-extending cancer drugs... the kind the newspapers love to rail against... and I say Onyx Pharmaceuticals Inc. (ONXX) has one of those...  It's called Nexavar.  It targets the formation of new blood vessels, starving tumors of the blood, and also the proliferation of tumor cells, making it unique among cancer wonder drugs... because it supposedly does both of these things.

ONXX's drug was approved for kidney cancer in 2005.  Before that, it was just a death sentence.

Nexavar has been approved for liver cancer... another one that almost a death sentence... in over 40 countries. 

ONXX got approval from South Korea, where the market for this type of liver cancer treatment is the same size as the U.S....

It is expected to get approval for Taiwan soon...

Like Genentech Inc. (DNA)'s Avastin, Nexavar seems to be a big, big drug with tremendous potential for treating numerous, different types of cancer...

We know from Bayer, ONXX's Nexavar development partner, that Nexavar's sales grew 107% year-over-year to $168 million in the second quarter.  That is unbelievable...

I think this drug, Nexavar, has blockbuster written all over it... meaning, eventually, I think it's going to do over $1 billion in sales.  Wow... maybe even more than that.

ONXX is running more trials for Nexavar...  Five additional ones for kidney cancer.  This is, by the way, what drew us to Celgene (CELG)... remember?  There were many different trials for Revlimid... That's what's happened to Nexavar...  Four additional trials for liver cancer, two for melanoma, which is not yet approved for...  four additional ones for lung cancer...

This drug hasn't been all good news for ONXX though...  Back on February 18th, they halted a Phase III trial for first-line treatment for non-small cell lung cancer.  And interim analysis revealed that the trial's results wouldn't meet the primary end point for overall survival.

The Street had been expecting ONXX to launch Nexavar for first-line treatment of this type of lung cancer in 2009.  No.  Local sales potential was $900 million.  The halted trial meant that the launch could be delayed until 2011... maybe even beyond... 

The news pancaked the stock... just crushed it... the house of pain...  $45 to $30 in a matter of days...

I'm not concerned.

Genentech Inc. (DNA)'s Avastin got dinged by the FDA a couple of times... but I say a blockbuster is a blockbuster, unless it rents movies...

.  .  .  .  .

Now let's go back to the biotech rubric because, in my opinion, ONXX has one more thing we love in a biotech stock, and it is takeover potential!...

Since 1994, ONXX has had that... Just like Roche - a Swiss company - is trying to scoop up the rest of Genentech Inc. (DNA)...  It would not shock me to see Bayer make a bid for ONXX...  buy, buy, buy!... as the strength of the Euro versus the dollar makes ONXX especially cheap for a European buyer like Bayer...

Here's the bottom line...