The 2020 Vision Collective invites you to a free evening of debate and discussion on the future of agriculture at the University of East Anglia, Norwich, Norfolk at 7.15pm on Wednesday 18 April, in Lecture Theatre 1.
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Biotechs suffer the herd instinct of investors
Andrew Clark
Wednesday April 11, 2001
The Guardian

As Dolly the Sheep grazes in her isolated Scottish paddock this morning, safely quarantined from foot and mouth disease, she may catch a whiff of fear in the air.

Her owner, PPL Therapeutics, is in such a perilous cash position that it will no longer be able to pay for her upkeep this time next year. After failing to raise funds on the stock market, the firm looks set to make a  humiliating cap-in-hand approach to its development partner, Bayer, for more funds.

PPL's predicament was greeted with dismay, but lit tle surprise, in the biotechnology sector yesterday. Sentiment has turned sharply, with the Nasdaq biotech index down a third since the beginning of the year.

In January, Scotia Holdings became the first quoted biotech firm in Britain to collapse into administration, having consumed £164m of investors' funds without producing a penny of profit. Then last month, heart valves  maker AorTech was forced to abandon a £64m cash call.

The gloomy outlook seems far removed from the dizzy heights of early 2000, when Cambridge Antibody Technology was valued at more £1bn despite boasting only two medicines in development.

The biotechnology industry is following a familiar pattern of tracking hi-tech shares, with a time lag of around three to six months. This has infuriated its followers, who point out that unlike dot.coms, biotech firms are actually delivering positive news, with a steady flow of strong results from products in clinical trials.

Celltech, Galen Holdings, Protherics, Vernalis and SkyePharma have all had recent approval to begin selling key medicines. A select few, led by  Celltech, should produce profits this year. There is far more good news around than bad, but this has not stopped biotech from catching an even worse cold than the rest of the market.

PPL has shown poor timing before - the firm tried to raise money in the last biotech bear market in 1998, and only just succeeded. The company now faces a real struggle to pay for its new factory and, as one online investor put it, "without a manufacturing plant, there can be no products, and without products there are no potential profits".