Biotech is one of the few industries that’s not as impacted by recessions and the typical business cycle.

While start-up biotech capital has been tougher to find over the past two years, innovation and medicine at larger, well-funded biotech companies remained largely on track.

We track several large biotech companies as well as a diversified biotech ETF called the Biotech HOLDRs (BBH:AMEX).

We note that BBH has been in an Uptrend since early September at $93.00. And in 2008, when the S&P 500 fell 37%, BBH was up 10.4% — demonstrating just how well biotech companies can act as a defensive sector and warrant allocation by investors into their portfolios.

That said, when markets rise, as they have in recent weeks, biotech companies seem to turn slightly out of favour.

For example, Amgen Inc. (AMGN:Nasdaq) is flat year-to-date, while the S&P is up nearly 6%. Biogen Idec Inc. (BIIB:Nasdaq), meanwhile, is doing slightly better, up 3.5% year-to-date, but it still lags the broader market. Both of these companies are also in Uptrends, according to SmarTrend.

We fully expect that if the market becomes jittery once again, the biotech sector may see additional capital flows. AER