When Arena Pharmaceuticals (Nasdaq: ARNA) released positive Phase III data on its obesity drug, Lorcaserin, many people expected shares to take off. After all, the company’s press release on Monday confirmed that the drug had proven to be safe and effective.

Talk about a winter of discontent… Over the past seven weeks, we’ve seen quite possibly one of the best examples of stock market fear in history.

Oil Bounces Back; Hungary Gets $25 Billion in Aid; P&G Boosted by Emerging Markets; Qwest Cuts Workforce; Airline Merger Cleared for Takeoff; Domestic Airfares Soar to Record High; Consumer Crunch Hits Comcast; Biotech Firm Plunges

There has been a lot of strong recommendations around biotech lately on Contrarian Profits.

Phase 1 Investor editor Rob Fannon recently wrote that biotech was one of the few market sectors to show positive returns as  many other stocks were getting hammered. He sees great values in the sector.

There’s a good reason for this strength. A struggling economy won’t hurt biotech and medical as much as, say, an automaker, retailer, or restaurant chain… And biotech is one of the few industries showing solid sales growth.

Swiss drug company Roche (OTC:RHHBY) may not get its hands on San Francisco-based biotech outfit Genenetech (NYSE:DNA) as quickly as it had hoped.

Genetech has formed a special committee of independent directors to evaluate the $89-a-share acquisition offer from Roche, which already owns 56 percent of the US biotech firm.

If the deal does go through it may be bad news for Roche and Genentech shareholders, according to Phase 1 Investor editor Rob Fannon in The Growth Stock Wire. But it would be good news for the biotech industry as a whole…

While I believe the bid is a bad move for Roche – and not a great proposal for Genentech shareholders – this mega-deal is actually good for the entire biotech industry… and its investors.

With Genentech…