"You should rest assured that Rutgers will be a member of the Big Ten, on time, in place," Delany said Monday after a news conference at Yankee Stadium to announce a deal with the Pinstripe Bowl.

Rutgers is scheduled to join the Big Ten in 2014, along with Maryland.

The school has been navigating its way through a bevy of problems in recent months. Men's basketball coach Mike Rice was fired for cursing and throwing balls at players, and athletic director Tim Pernetti was forced out for not getting rid of Rice sooner.

Incoming athletic director Julie Hermann has faced allegations of being verbally abusive while leading Tennessee's volleyball team in the 1990s.

Delany called Rutgers' problems a local issue that will not involve the league.

"Issues of personnel, decisions made by selections committees in the context of executive committees, those are not conference matters," he said. "Those are not conference matters those are local matters. Who they hire, who they retain, who they extend are not matters for the Big Ten conference whether it be at Michigan or at Rutgers or at Nebraska or at Illinois or at any of our schools."

Delany is scheduled to spend two days later this week at Rutgers. On Thursday, he is scheduled to meet with coaches and on Friday he'll play in the school's golf outing.

Rutgers spokesman Jason Baum said Hermann, who doesn't official start in her new position until June 17, is scheduled to be on campus this week, but her schedule has not been finalized.

"I believe that things will calm down," Delany said. "They're not calm now, that's pretty obvious. My job is not ... to solve their problems. My job is to build and promote and help if I can, if asked."

Rutgers has been a member of the Big East, and will spend this season in the reincarnated version of that league, the American Athletic Conference. The Big Ten's addition of Rutgers was part of the conference's long-term strategy to have a greater presence on the East Coast.

"What we focused on and continue to focus on is the quality of the institution," Delany said. "It's membership in AAU. It's resilience. It's tradition. We believe then, and now, that (Rutgers) will be a great member of the Big Ten conference, notwithstanding the fact that they had a number of high-profile situations that have received a lot of coverage.

"I won't be coming in to provide advice. I'll be coming in to provide support."

Still, just setting up the two-day meeting in Seoul, through a 17-hour negotiating session that ended early Monday, required the kind of diplomatic resolve that has long been absent in inter-Korean relations, and analysts say it could be a tentative new start. It's also a political and diplomatic victory for new South Korean President Park Geun-hye, who expressed her country's interest in talks and rebuilding trust even as she batted back North Korean war rhetoric with vows to hit back strongly if attacked.

"It's very significant that they're sitting down and talking at all ... after all the heated rhetoric this spring," said John Delury, an analyst at Seoul's Yonsei University. "It shows political will. Both sides could have called it off."

The main topics will be stalled rapprochement projects left over from friendlier days, including the resumption of operations at a jointly run factory park just north of the border. It was the last remaining symbol of inter-Korean cooperation until Pyongyang pulled out its workers in April during heightened tensions that followed its February nuclear test.

North Korea, however, is also pushing for something Seoul hasn't agreed to: A discussion Wednesday of how to jointly commemorate past inter-Korean statements, including the anniversary Saturday of a statement settled during a landmark 2000 summit between liberal President Kim Dae-jung and North Korean leader Kim Jong Il, the current ruler's late father.

This matters to North Korea because the June 15 statement from the 2000 summit, along with another 2007 leaders' summit, include both important symbolic nods to future reconciliation and also economic cooperation agreements that would benefit the North financially.

Those commitments faded after Park's conservative predecessor, Lee Myung-bak, took office in 2008. His insistence that large-scale government aid be linked to North Korea making progress on past commitments to abandon its nuclear ambitions drew a furious reaction from Pyongyang. Relations deteriorated further in 2010 after a North Korean bombardment of a South Korean island killed four people, and the sinking of the South Korean warship Cheonan killed 46 sailors.

A Seoul-led international investigation blamed a North Korean torpedo for the Cheonan attack, and South Korea has demanded an apology from the North before it will allow any exchanges. Pyongyang denies any role in the sinking, and the two sides will presumably bring those irreconcilable positions with them Wednesday.

Since her presidential campaign, Park has mixed a tough line with policies of engagement, aid and reconciliation with the North a recognition of the frustration many South Koreans felt about Lee's hard-line policies.

Analyst Park Hyeong-jung said North Korea wants the past statements on the agenda to forge a "relationship that is to their advantage. They want to hold the present South Korean administration accountable for the declarations of past administrations."

"This is the first time in a long time both sides are meeting," said Park, a senior research fellow at the government-affiliated Korea Institute for National Unification in Seoul. "Rather than a breakthrough, this week's talks are only the beginning."

Both Koreas have also agreed to discuss resuming South Korean tours to a North Korean mountain resort and the reunion of separated families, officials said.

There's little chance that the narrowly defined talks will tackle the crucial question of pushing Pyongyang to abandon its nuclear bombs. North Korea has said it will never give them up, though the U.S. and other countries say it must if it is to rebuild its relationship with the rest of the world.

While still skeptical of North Korea's intentions, the U.S. has welcomed South Korea's efforts to reduce tensions with the North. But the State Department is stressing that Pyongyang must take concrete steps toward denuclearization if it wants to foster ties with Washington.

"We've long made clear that we are open to improved relations with North Korea if it is willing to make clear actions to live up to its international obligations and commitments," spokeswoman Jen Psaki told reporters Monday.

It's still unclear who will represent each side in Wednesday's inter-Korean talks. Seoul said it will send a senior-level official responsible for North Korea-related issues while Pyongyang said it would send a senior-level government official, without elaborating. A minister-level summit between the Koreas has not happened since 2007.

Dialogue at any level marks a positive sign in the countries' recent history, which has seen North Korean nuclear tests and long-range rocket launches. The armistice ending the three-year Korean War that was signed 60 years ago next month hasn't been replaced with a peace treaty, leaving the Korean Peninsula technically at war.

Analysts express wariness about North Korea's intentions, with some seeing the interest in dialogue as part of a pattern where Pyongyang follows aggressive rhetoric and provocations with diplomatic efforts to trade an easing of tension for outside concessions.

After U.N. sanctions were strengthened following North Korea's third nuclear test in February, Pyongyang, which is estimated to have a handful of crude nuclear devices, threatened nuclear war and missile strikes against Seoul and Washington, pulled its workers from the jointly run factory park at the North Korean border town of Kaesong and vowed to ramp up production of nuclear bomb fuel. Seoul withdrew its last personnel from Kaesong in May.

Chang Yong-seok, a senior researcher at Seoul National University's Institute for Peace and Unification Studies, said he is optimistic that the Koreas can resume work at Kaesong and reunions for separated families. But he said a quick breakthrough is unlikely because North Korea's gesture for closer ties runs counter to South Korea's demand for apologies.

___

AP writer Elizabeth Shim in Seoul and Matthew Pennington in Washington contributed to this report.

Foschini, which also sells jewellery and furniture, said diluted headline earnings per share totalled 851.3 cents in the year to end-March compared with 766.1 cents a year earlier.

The result fell short of the 859 cents estimatd by Thomson Reuters StarMine, which gives more weight to forecasts from historically accurate analysts.

Headline EPS, the primary measure of profit in South Africa, exclude certain one-off items.

Sales rose 11 percent to 12.8 billion rand.

Shares in the Cape Town-based company, which are down about 8 percent this year, were little changed at 108.50 GMT, lagging behind a 1.3 percent gain on the JSE All-share index.

After more than two years as investors' darlings, South African retailers are falling out favour as doubts creep in about the health of debt-fuelled consumer spending and views that share prices have been pushed to unjustifiably high levels.

South African industry-wide retail sales slowed 2.8 percent year-on-year in March from 3.9 percent in February, official data showed.

Foschini, which sells the bulk of its products on credit, said net bad debt as a percentage of its debtors' book increased to 10.5 percent from 9.4 percent in the previous year.

The company said it plans to open 150 new stores this year.

McQuaid said Armstrong should travel to UCI headquarters in Switzerland to tell all about his doping history and offer to help clean up the sport.

"He should jump on his private plane, come to Switzerland and say, 'What should I do?'" McQuaid told reporters. "He still hasn't apologized to the sport of cycling. If he has information that is valuable to the sport he should come forward."

McQuaid said Armstrong should also meet with the U.S. Anti-Doping Agency and World Anti-Doping Agency to provide full details on how he cheated to win the Tour de France seven times. The American was stripped of all the titles last year after admitting to doping.

"Everyone accepts he has not come clean," McQuaid said. "He should sit down and work with us."

McQuaid and the UCI have come under fire for failing to catch Armstrong and the federation has been accused of complicity and coverups in his cheating.

But, in a wide-ranging interview with reporters on the sideline of the SportAccord Convention, McQuaid repeatedly defended himself, the UCI and former president Hein Verbruggen.

"I do not think the UCI made mistakes," the Irish official said. "The facts show the UCI was always the most advanced federation in the fight against doping. The problem was the products that couldn't be tested for at the time. There were no tests available for the products. The UCI was not to blame.

"Ten or 15 years ago, the armoury was much weaker. Today we are spending 7.5 million euros ($9.6 million) a year on testing. We are not spending 7.5 million euros ($9.6 million) to let cheats get away."

McQuaid said the UCI tested Armstrong 200 times between 1999 and 2005, while USADA tested him 12 times during that period.

"All the blame has been put on the UCI," he said. "Maybe USADA and WADA should also take some responsibility."

McQuaid said he has invited USADA chief executive Travis Tygart for talks in Switzerland. Tygart, who has been one of the UCI's harshest critics, has accepted and a date for the meeting is being arranged, McQuaid said.

The UCI head claimed he never suspected Armstrong was cheating during his dominance of the Tour de France, saying he had been inspired by the rider's comeback from cancer.

"I didn't know what he was up to. I was fooled," McQuaid said. "I believed there was no way a man so close to death would go and start putting stuff into his body that could be dangerous. ... I gave him the benefit of the doubt."

McQuaid, who has faced calls to step down in the wake of the Armstrong revelations, said he has never considered resigning.

"I firmly believe I am making a difference," he said. "I firmly believe there is a change in the peloton and the sport has changed."

McQuaid, who has headed the UCI for eight years, is up for re-election for a third term in September.

"I want to eradicate doping," he said. "I want to see this through. I want to finish what I started."

Despite the continuing questions over the UCI's role and the fallout from the Armstrong case, McQuaid believes the scandal will fade away and the sport has a rosy future.

"I believe it's in the past,' he said. "I believe it will pass over. It will go away. The sport has a bright future. We're becoming truly global."

McQuaid cited the growth of the sport in Asia and Africa, and predicted a "black African will make the podium of a major tour within the next six years."

On another subject, he said the UCI is proposing the addition of BMX freestyle and mountain bike elimination events for the 2016 Olympics in Rio de Janeiro. Also still in discussions, he said, is the possibility of bringing skateboarding into the Olympics under the UCI umbrella.

The book, which once belonged to the critic and author Malcolm Cowley, will go under the hammer along with a group of Fitzgerald's letters and an unpublished poem in the June 11 books and manuscript sale in New York.

"The book is now almost universally recognized as standing among the great achievements of 20th-century American literature with the tragic story of Jay Gatsby, and more broadly, the American dream, resonating with readers for generations," Sotheby's said in a statement announcing the sale.

Fitzgerald wrote the Jazz Age drama while living in France. Although it was popular when it was published in 1925, it wasn't until Fitzgerald's death in 1940 that it was hailed as the great American novel.

News of the sale comes just weeks after the opening of director Baz Luhrmann's film "The Great Gatsby," starring Leonardo DiCaprio as the hero of the tragic love story.

(Reporting by Patricia Reaney; Editing by Jan Paschal)

Under security rules, the commander's name was not to be made public, but the draft report did not say whether Panetta knew a member of the public was in his audience at CIA headquarters. A former CIA official familiar with the event said Wednesday that Panetta did not know of the writer's presence; if the disclosure was inadvertent it would not constitute a violation of the rules by Panetta.

The former official spoke on condition of anonymity because a security issue was involved.

The unpublished draft report was first disclosed by the Project on Government Oversight and confirmed by Rep. Peter King, who asked for the investigation nearly two years ago. The draft report did not accuse Panetta of wrongdoing.

King, R-N.Y., said he has not seen the draft report but was briefed on some of its contents. "It's been told to me what's in there," King said. He said it confirmed his suspicion that the Obama administration cut corners on security in its dealings with Hollywood executives eager to produce a film about the May 2, 2011, raid on bin Laden's compound in Pakistan.

King said it would not surprise him if Panetta was unaware that the movie writer was in his audience.

"Whatever he did was not done intentionally," King said, adding that he still questions why someone allowed a person without proper security clearances to attend.

In the movie, which received a best picture Oscar nomination, Panetta's character was played by James Gandolfini.

"CIA was very sloppy and the administration was very sloppy in enforcing security procedures when it came to Hollywood," King said in a telephone interview. "It almost seems as if they were star-struck."

The episode is among many that have raised questions about leaks of classified information and the apparently selective enforcement of security rules by government officials.

A Pentagon spokesman, Army Col. Steve Warren, said the Defense Department had no comment on the draft report by its inspector general.

Bridget Serchak, a spokeswoman for the inspector general, said there is no projected date for finishing the report. She said that if it is unclassified when completed, it will be made public.

The report cited two instances when administration officials divulged the names of individuals involved in the bin Laden operation in both cases to makers of "Zero Dark Thirty." The movie told the story of the decade-long hunt for the al-Qaida leader and the dark-of-night Navy SEALs raid in which he was killed.

The first instance was a July 15, 2011, interview of the Pentagon's top intelligence official, Michael Vickers, by the film's director, Kathryn Bigelow, and screenwriter Mark Boal. In that session Vickers gave them the name of a special operations planner whose identity was supposed to be protected from public release, the report said.

The second instance was a June 24, 2011, awards ceremony at CIA headquarters in which Panetta identified the ground commander of the SEALs raid, with Boal in attendance. The report did not say whether Panetta knew Boal was present. But the former agency official, who was present at the ceremony, said Wednesday that Panetta did not know Boal was in the audience and assumed that everyone in the audience of at least several hundred people had proper security clearances. The official spoke on condition of anonymity because a security matter was involved.

The report said the ground commander's name was supposed to be protected from public release, under federal law. Although the name was mentioned in Boal's presence, Boal did not subsequently use the name in any public manner.

The report also said without further explanation that Panetta "also provided (Defense Department) information identified by original classification authorities as top secret."

The report did not address the question of possible penalties for Panetta's actions.

Several days after the ceremony, Panetta became defense secretary. He held that post until February 2013, when he retired.

A telephone call to his office in California on Wednesday was not immediately returned.

"I think Secretary Panetta should explain what happened, why it happened," King said. "And that's all I'll say right now on it. It is a serious matter. I'm sure there was no malice at all by Panetta."

The draft report said that although one or both of the movie executives were present at both the Vickers interview and the CIA awards ceremony, investigators concluded that no classified or sensitive information about Navy SEALs tactics, techniques or procedures were exposed.

In his August 2011 request for an investigation by the Pentagon, King also asked the CIA's inspector general to look into the matter. He said Wednesday that the CIA is now in the second phase of its investigation.

In the first phase of its probe, the CIA found that the agency's office of public affairs did not keep adequate records on its dealings with the entertainment industry, King said, and that "CIA employees did not always comply with agency regulations to prevent the release of classified information during their dealings with the entertainment industry."

WASHINGTON (Reuters) - A U.S. Food and Drug Administration panel of outside experts reopened one of the biggest drug controversies in recent years on Wednesday at a meeting where they will decide whether to recommend lifting marketing restrictions on GlaxoSmithKline Plc's Avandia diabetes drug.

The two-day FDA advisory committee meeting is not expected to bring about a major boost in sales for the onetime multibillion dollar product. But its findings may help revive the credibility of the British drugmaker's original research and shed light on the current U.S. regulatory approach to the health risks posed by new medicines.

Avandia was once the world's best-selling treatment for type 2 diabetes, with annual sales of $3.2 billion. Its use was heavily restricted in 2010 because of the possibility of increased risk of heart attack and stroke. It was withdrawn from the market in Europe in 2010, and only 3,000 people in the United States take it today.

Glaxo has said it has no plans to promote Avandia again, even if the FDA panel recommends lifting restrictions on sales of the drug, whose generic name is rosiglitazone.

The advisory panel session focused on a debate over the value of a Duke University "readjudication" of Glaxo's Record safety study that forms the basis for the expert panel's deliberations over the next two days.

FDA staff said in briefing documents this week that the Duke analysis backed Glaxo's safety findings for Avandia but also found that scores of smaller trials raised questions over whether the pill increases heart risks.

Dr. Thomas Marciniak, medical team leader of FDA's Division of Cardiovascular and Renal Products, warned panelists that the readjudication by the Duke Clinical Research Institute (DCRI) cannot be considered independent. The effort was financed by and conducted in collaboration with the drugmaker, which has also paid thousands of dollars in consulting fees to Duke's lead investigator, he said.

"They got it right for what they were allowed to say," said Marciniak. Some Record documents were redacted, he said, and original records of potential adverse events were deleted.

"The readjudication was limited because it relies largely on the original database and source documents in collaboration with GSK," he added.

He offered to treat Glaxo Chief Executive Officer Andrew Witty and five of the CEO's colleagues to dinner at an expensive London restaurant if his views prove wrong.

Marciniak said it would have been better for FDA to handle all the data on Avandia with company authorization, pointing to concerns that the regulatory agency has less data on Avandia than the Duke researchers. That prompted panel members to express concern about how much proprietary data Glaxo has agreed to share with the agency.

NO AVANDIA PROMOTION

Researchers for Glaxo and DCRI defended Duke's reexamination of the Record study as comprehensive and independent and said that it showed no statistically important risk for heart-related deaths from the use of Avandia. Some FDA staff members also described the study as well planned and well conducted.

"There is no convincing evidence for systemic, systematic or intentional manipulation of efficacy or safety outcomes in Record," said Dr. Preston Dunnmon, an FDA official who reviewed the Record study, which spanned 4,400 patients across 25 countries, most of them European.

But members of the panel still questioned whether the reevaluation of Record offered an adequate assessment of the drug's safety profile.

"I'm not aware of any evidence definitively establishing cv (cardiovascular) safety," said Dr. Sanjay Kaul of Cedars-Sinai Heart Institute in California.

"I believe that based on the data that we have been provided, that we have identified all of the events that were reported," replied the Duke institute's associate director, Dr. Kenneth Mahaffey.

But Mahaffey acknowledged a potential bias in the underlying data because of the original study's open-label style and said the Duke team did not systematically investigate the information it received from Glaxo to ensure it was complete: "We just didn't have the ability to do that."

The panel's patient representative, Rebecca Killion of Washington, D.C., asked FDA officials whether they had received assurances from Glaxo that the information the company provided to Duke researchers had not been altered.

"Do we have evidence that there has been willful redaction and withholding of information? That's a very good question," replied Dr. Mary Parks, director of FDA's division of metabolism and endocrinology products.

But FDA officials pointed out that the data remains the property of Glaxo and is not subject to outside scrutiny. A Glaxo official later told the meeting that the company provided all the data it had to Duke.

Morningstar analyst Damien Conover predicted only a slight chance that the meeting will prompt the FDA to ease Avandia sales restrictions significantly.

"But if they do, that could signal that the FDA is a little more willing to accept more side effects than it has in the past," Conover said.

Glaxo has settled lawsuits filed by tens of thousands of U.S. patients who had taken Avandia and claimed the company failed to inform them about risks. Several thousand other cases remain pending. The company last July agreed to pay $3 billion to settle allegations that it failed to provide the FDA with safety data on Avandia and marketed other drugs improperly.

European regulators required the Record safety trial over concerns that drugs in Avandia's class - called thiazolidinediones, or TZDs - may increase the risk of heart failure.

The FDA clamped down on Avandia's use in September 2010 after an FDA advisory panel voted that the Record data raised significant concerns of a greater risk of heart attack and stroke than other treatments, including Takeda Pharmaceutical Co's Actos, another TZD.

Although the FDA allowed Avandia to remain on the U.S. market, it commissioned Duke to analyze results of the Record trial to better assess the drug's safety and to examine criticisms over trial design and how the data was handled.

In a briefing document released ahead of the two-day meeting, the FDA said the study's methods and analyses passed muster with the Duke group and that it appeared to agree that Avandia was not associated in the Record trial with increased risk of heart attacks and stroke.

Avandia sales had been on a downhill slide since 2007, when Dr. Steven Nissen, head of cardiology at the Cleveland Clinic, said a pooled analysis of 42 studies showed Avandia increased the risk of a heart attack by 43 percent. Sales of Avandia, which was approved in 1999, plunged after the negative publicity.

The FDA now requires heart-safety data before approving new diabetes drugs.

(Additional reporting by Ransdell Pierson in New York; Editing by Lisa Von Ahn and Phil Berlowitz)

The list is compiled using data from independent and chain bookstores, book wholesalers and independent distributors nationwide.

Hardcover Fiction Last Week

1. "Whiskey Beach" by Nora Roberts - (Putnam, $27.95)

2. "Daddy's Gone a Hunting" by Mary Higgins (Simon & Schuster, $26.99) 1

3. "Talking Eve" by Iris Johansen - (St. Martin's, $27.99)

4. "Starting Now" by Debbie Macomber (Ballantine, $26.00) 3

5. "Don't Go" by Lisa Scottoline (St Martin's, $27.99) 2

6. "Six Years" by Harlan Coben (Dutton, $27.95) 5

7. "Unintended Consequences" by Stuart Woods (Putnam, $26.95) 4

8. "Gone Girl" by Gillian Flynn (Crown, $25.00) 7

9. "Life After Life" by Kate Atkinson (L.B./Reagan Arthur, $27.99) 6

10. "The Burgess Boys" by Elizabeth Strout (Random House, $26.00) 9

Hardcover Nonfiction

1. "Lean In" bySheryl Sandberg (Knopf, $24.95) 1

2. "LeaderShift" by Orrin Woodward & Oliver DeMille (Grand Central/Business Plus, $25.99) -

3. "The One Thing" by Gary Keller (Bard Press, $24.95) 13

4. "The Fast Metabolism Diet" by Haylie Pomroy (Harmony, $26.00) 2

5. "It's All Good" by Gwyneth Paltrow (Grand Central, $32.00) 3

6. "The Duck Commander Family" by Willie & Korie Robertson (Howard Books, $23.99) 4

7. "The Athena Doctrine" by John Gerzema & Michael D'Antonio (Jossey-Bass, $27.95) -

8. "Life Code" by Dr. Phil McGraw (Bird Street Books, $26.00) 5

9. "Man 2.0 Engineering the Alpha" by John Romaniello & Adam /Bornstein (HarperOne, $27.99) -

10. "Relish" by Daphne Oz (William Morrow, $27.50) -

Week ended April 21, 2013, powered by Nielsen BookScan (c) 2012 The Nielsen Company.

(Editing by Chris Michaud and Bill Trott)

Letters sent to Mr Bloomberg and his gun-control group contained material believed to be the deadly poison ricin and made a reference to gun control, New York police said on Wednesday.

A Secret Service official said the letter sent to the White House was similar but did not elaborate. The White House mail-screening facility turned it over to the FBIs Joint Terrorism Task Force, the Secret Service official said on condition of anonymity.

Authorities have stopped several ricin-laced letters in recent weeks. A Tupelo, Mississippi, man was charged last month with sending poison-laced letters to Mr Obama and two other public officials. Everett Dutschke was being held on charges of developing and possessing ricin and attempting to use it as a weapon, according to the Justice Department.

Authorities also intercepted a letter sent to US Senator Roger Wicker of Mississippi. Preliminary tests showed it contained ricin.

Separately, federal authorities last week arrested a Washington State man, Matthew Ryan Buquet, who they suspect mailed a letter containing ricin to a US district judge in Spokane. Mr Buquet, 37, was charged with mailing threatening communications.

On Thursday, the FBIs Seattle office said in a statement that a similar letter containing ricin was sent from Spokane to Mr Obama and postmarked May 13. The letter Mr Buquet is accused of sending to the judge in Washington state was postmarked the same day.

Reuters

(Reuters) - Biotech stocks are so hot that even some of the bulls are starting to find themselves on edge.

An index of biotech drugmakers' shares has climbed nearly 50 percent in the past 12 months to all-time highs as the industry starts to launch drugs developed by identifying genes associated with disease - a revolution made possible by decoding the first human genome more than 10 years ago.

The rise at such a fast pace is triggering the inevitable talk of a bubble, especially when investors are reminded that more than 90 percent of experimental drugs that reach mid-stage testing in humans do not make it past that point.

"Genetic information is providing a big opportunity for new drug development," said Rajiv Kaul, portfolio manager of Fidelity Investments Select Biotechnology Portfolio, in Boston. "There are exciting new opportunities, but you also need to be careful because most drugs fail."

Compared with a year ago, the Nasdaq Biotech Index, which is weighted by market cap, is up 45 percent, the dollar-weighted Arca Biotech Index has risen 35 percent, and the Pharmaceutical Index of large U.S. and European drugmakers' shares has increased 32 percent. Over the same period, the S&P 500 Index has gained 25 percent.

A more favorable regulatory environment and lower capital costs are helping fuel the rally. The U.S. Food and Drug Administration approved 39 drugs last year - a record beaten only in 1996. Deutsche Bank, meanwhile, estimates that interest costs for large-cap biotechs to borrow in the capital markets are about 2 percent lower today than in 2007, and are likely to remain there for several more years.

Still, with the Nasdaq Biotech Index trading well above its previous all-time peak in 2000 - just before the epic dot-com bust - some investors are thinking about locking in profits.

"The biotech industry is in good shape, but there's going to be a pause in news from medical conferences after ASCO (the American Society of Clinical Oncology), and I am thinking of taking profits on some of the large biotech names and switching some of the money into mid-cap companies," said Nathalie Flury, manager of the Julius Baer Biotech Fund at Swiss & Global Asset Management, in Zurich. "There are no big conferences to provide catalysts between June and August."

The annual ASCO meeting, where companies unveil their latest cancer drug research, will take place in early June in Chicago.

"I still think the sector has some room to grow, but it is not going to be as easy as it has been," said David Heupel, senior healthcare analyst at Thrivent Investment Management, in Minneapolis.

He and others said the sector's latest run-up is also being prompted by a newfound attraction to medical biotech from managers of general-interest mutual funds hunting for strong earnings growth potential.

"The reason is because they are looking for significant earnings growth, driven by new products over the next few years at Gilead, Biogen and Celgene," said Michael Yee, an analyst at RBC Capital Markets, in San Francisco.

BEST AND WORST BUSINESS

Gilead Sciences, the world's largest maker of branded HIV drugs, is viewed as the leader in a race to develop a more safe and effective therapy for hepatitis C, a market Wall Street expects to garner billions of dollars in annual sales.

Short interest - a potential red flag that measures shares borrowed by investors expecting a price drop - has changed little over the past year for large-cap biotechs, standing at 2.3 percent of outstanding shares in early May, according to Jefferies & Co.

Short interest in biotech companies with market caps between $2 billion and $10 billion has fallen to 9.2 percent from 11.3 percent in the past 12 months, while short interest for companies with market caps of $500 million to $2 billion has increased to 15.2 percent from 12.7 percent over the past year.

Wall Street analysts estimate that shares of large-cap Gilead, which have more than doubled over the past year, trade at about 26 times 2013 earnings and 12 times 2015 earnings.

"That type of earnings growth is very impressive," Yee said. "And it all comes against a backdrop of a really tough macro-environment."

Concerns about overall consumer sentiment have served to cool investor interest in other growth-oriented sectors, including technology. The S&P Information Technology Sector Index has gained about 13 percent in the past year.

"That's why you are seeing more money moving into biotech," Yee said.

Even with the rally, some investors say biotech valuations remain attractive.

"These companies seem to be earning a much better return on their capital," Heupel said. "They are not off the charts expensive."

Earnings multiples for biotech shares remain well below the levels seen before the latest stock market crash in 2008.

The discount is even steeper when compared with multiples reached before the bursting of the biotech bubble in 2000. Amgen, for example, traded at an average price-to-earnings multiple of 59 in 2000, compared with its current P/E ratio of 14.4 times expected 2013 earnings, according to Deutsche Bank.

The question is how long the rally will continue.

Consensus estimates call for average combined annual earnings growth of 21 percent for biotechs in the next three years, compared with 9 percent for S&P 500 companies, according to Deutsche Bank.

"Biotech is both the worst business in the world and the best business in the world," Kaul said. "It is high risk ... but when you have a good business, there tends to be value there over long periods of time."

(Additional reporting by Ben Hirschler in London; Editing by Ed Tobin and Jan Paschal)