After a very long drought the biotech sector became hot for a few days following the announcement that Sanofi wanted to acquire Genzyme. The deal would be huge as 10% of the sector would disappear overnight, for cash. Recently it has been reported that talks are on hold due to the fact that the Sanofi board is on a month long vacation (its good to be a European in August).
Arbs still think there is a good chance a deal will happen as Genzyme trades at a large premium to where it would be without a bid. However, the sector has completely given up its gains as investors cannot look past the end of the day. I believe a deal is likely to happen next month and the whole sector will benefit. In the worst case the deal does not happen and one is left with very reasonable valuations, many companies that are buying back stock aggressively and businesses that should do well even in a downturn.