- The Washington Times - Thursday, June 29, 2000

BERKELEY, Calif. The mapping of the human genetic code will encourage investors to turn to the biotechnology industry in search of a new road to riches, industry executives predict.

Scientists announced at a White House news conference Monday that the human genetic code essentially has been deciphered, a monumental achievement that opens a dramatic new frontier in medicine.

Biotech industry luminaries, who gathered for a conference at the University of California, Berkeley, said the attention generated by the day's genome breakthrough likely will cast a brighter spotlight on biotech's profit potential.

"I think the biotech industry today is right where the computer industry was in the 1970s," said Randy Scott, president and chief executive officer of Incyte Genomics, a Palo Alto biotech firm that has enjoyed a 49 percent run-up in its stock so far this year. "We think the next 20 to 30 years are going to be known as the genomics age."

Not everyone is convinced the biotech industry is poised to change the stock market's financial DNA, however.

G. Steven Burrill, CEO of merchant banking firm Burrill & Co., recalled that the biotech industry has broken the hearts of infatuated investors in the past.

"The capital markets have had a love-hate relationship with biotech largely because investor expectations have exceeded the reality," he said.

Biotechs have had erratic performances. Many drugs and therapies that held out great promise didn't pan out, making for a bumpy ride for investors.

Despite past disappointments, interest in biotech companies is healthy.

In 1999, biotech companies received $10 billion from stock market investors and venture capitalists after getting just $5 billion in each of the previous two years, according to Eric Roberts, a managing director for Lehman Brothers.

After a spate of initial public offerings since last fall, about 348 of the nation's 1,300 biotech companies are publicly traded on stock exchanges.

Experts believe the continuing research into the human genome and the effort to develop revolutionary drugs from the findings is bound to attract more money to the biotech industry.

"We are going to see some intense enthusiasm for funding basic research," said Carl Feldbaum, president of the Biotechnology Industry Organization, a national trade group.

The bullish outlook for the biotech industry reflects the expectation that scientists will be able to use the human genome research to develop more effective drugs to treat some of the world's most devastating diseases, such as cancer and Alzheimer's.

Finding a cure to cancer would be worth about $47 trillion to the U.S. economy alone, according to a study conducted by University of Chicago researchers Bob Topel and Kevin Murphy.

Even if outright cures aren't found for deadly diseases, the biotech industry is still in a position to benefit from demographic changes that should create a larger market for all kinds of drugs and treatments. The number of people older than 65 is expected to grow from 550 million in 1998 to more than 1 billion in 2020, according to the World Health Organization.

The biotech industry also offers plenty of downsides. What can appear to be promising new drugs in the early development stages can turn out to cause unwelcome side effects later, preventing them from reaching the market.

"There will be dead ends in the road ahead. It's bound to happen," said Ross DeVol, director of regional studies for the Milken Institute, a Santa Monica think tank that foresees a bright future for the biotech industry.

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