U.S. drug stocks hit yearly lows as market rattles

NEW YORK (Reuters) - Major pharmaceutical, biotech and medical device stocks hit 52-week lows on Friday, as the broad market volatility claimed sectors traditionally considered safe havens.

Each major U.S. drug stock hit its lowest price in at least a year in Friday trading.

"Every stock is being taken down," said David Katz, chief investment officer at Matrix Asset Advisors. "Of late, there's this massive disconnect between the stock price and the fundamental business value, and the drug stocks are caught up in that as well."

The American Stock Exchange Pharmaceutical index .DRG of large U.S. and European drug makers fell 2.6 percent on Friday, while the American Stock Exchange Biotech index .BTK ended down 3.6 percent.

Pfizer Inc (PFE.N), Johnson & Johnson (JNJ.N), Merck & Co (MRK.N) -- all components of the Dow Jones industrial average .DJI -- were among the stocks hitting lows, although Merck was the lone large U.S. drug stock to close in positive territory.

Wyeth WYE.N was the biggest loser among pharmaceutical stocks, finishing down 6.5 percent. Biotech companies Biogen Idec (BIIB.O) and Gilead Sciences Inc (GILD.O) also touched 52-week lows, as did medical device makers such as Boston Scientific Corp (BSX.N) and Medtronic (MDT.N).

Les Funtleyder, a healthcare analyst with Miller Tabak & Co, said he was at a loss to explain why Johnson & Johnson shares fell as much as 9.6 percent during the day.

"You're seeing stuff that doesn't make sense unless they're going out of business," he said. "It seems like emotional or forced selling, rather than people taking a view of the core business."

(Reporting by Lewis Krauskopf and Ransdell Pierson)