Has ANYTHING changed with this company to explain this stock weakness??
So, how come GNLB is NOT gettin' this 'shot...'??
Posted at 8:26 p.m. PST Tuesday, March 28, 2000
Genomics giving shot in the arm to biotech
Investor enthusiasm and capital returning to rejuvenate industry
BY LISA M. KRIEGER
Mercury News Staff Writer
BOSTON -- The fledgling field of genomics is leading the rejuvenation of the biotech industry, pulling in capital and investor enthusiasm to a once-desperate industry, according to investors attending the conference of the Human Genome Project here.
The field didn't even have a name 20 years ago. Genomics, the study of genes and their functions, creates the road map needed to navigate the vast amount of data generated by the federal government's Human Genome Project and its private competitors.
The nation's genomic companies tap the commercial value of this data by selling these maps, or the cloned copies of the genes themselves, to scientists around the world. Despite the volatility of recent weeks, genomic stocks are up 40 percent to 50 percent since the beginning of the year, said William Reardon, partner in PricewaterhouseCoopers in Boston.
``Genomics has taken off,' said Reardon. ``This increased level of interest is turning around a (financial) drought period of '98 and '99, the longest and driest of biotech's dry spells. We have witnessed a resurgence in the past five months that is quite remarkable.'
The financial health of the nation's 12 to 15 genomic companies is attributable, in part, to the completion last week of the entire genome of the fruit fly, Drosphilia melaganster, and the imminent completion of the human genome, expected within the next several months, investors said.
Also driving the companies' success is their innovative application of new computer technologies to genetics, using super-fast machines to test and sift through the body's estimated 100,0000 genes. These computers create, in essence, a gene-finding assembly line that is far more efficient than even the speediest lab tech.
``When we have all this data, the question is, `What do we do with it? How do you manipulate it to get something meaningful?' ' Reardon asked. ``This has fueled interest in companies that use the data to understand more clearly the causes of disease -- and develop products to combat it.'
With genomics, ``we will soon be entering the era of personalized, prognostic medicine,' predicted Mark Levin of the genomics company Millennium. ``Inside the cell, you can get a better understanding of the gene-drug-disease interaction.'
One of the leaders of the boom is the Palo Alto-based genomic company Incyte, which provides tools that are essential to pharmaceutical and biotech companies .
Incyte is now valued at $3 billion, up from $600 million last October. During the same period, stock prices climbed from $16 to $110 a share, according to co-founder and Chief Executive Officer Roy Whitfield.
Name change
Last week, the company changed its name from Incyte Pharmaceuticals to Incyte Genomics Inc., reflecting its focus on assembling the world's largest and most comprehensive genetic library. It has partnerships with 18 of the top 20 pharmaceutical companies, as well as several universities to provide genomic information.
Incyte last week also unveiled its e-commerce genomics program, offering a complete online suite of database products. Any scientist can log onto Incyte's Web site, inquire about a specific gene, and then see a view of the gene at no cost. The researcher can buy, via e-mail, the additional gene data or a clone of the gene for use in research.
Just associating with Incyte can boost fortunes. When Corixa Pharmaceuticals of Seattle signed up for its gene data, share prices jumped 30 percent.
Incyte's recent increase in valuation allowed the company to raise $622 million in February to expand its St. Louis-based gene distribution center. The facility -- called ``the Amazon.com of genetics' by Incyte chief scientific officer Randy Scott -- sells physical copies of genes to scientists for prices ranging from several thousand dollars to $20,000 each.
Rival company Celera Genomics of Rockville, Md., also has caught the eye of the investment community. Going back to the market for additional funding, it completed a secondary stock offering this month that brought the company $944 million.
Celera uses dozens of machines to sequence genes, placing it well ahead of the federal government in the race to map the whole human genome. It plans to sell data interpreting the map and someday perhaps sell to individuals the data on their own genetic makeup.
A third major genomics company, Human Genome Sciences, has sold exclusive rights to its gene discoveries to Britain's giant SmithKline Beecham PLC.
In the first two months of this year, the biotech industry reaped an estimated $8.5 billion from public and private investments, according to a database compiled by the trade publication BioCentury. This exceeds all funding from last year.
``The industry is not undercapitalized any more,' said Levin, of Millennium. ``We will have raised $50 billion by the end of this year.'
``There were four profitable biotech companies in 1994; there are 35 this year,' Levin said. Last summer, many biotech companies were down to two to three months' worth of cash and were preparing to pull the plug.
Mutual support
No longer do biotech companies see the large pharmaceutical companies as their saviors, said William Haseltine, CEO of Human Genome Sciences. Increasingly, they turn to each other for support.
``There is a new type of alliance of well-capitalized biotech companies -- biotech to biotech,' Haseltine said. ``We have key assets to offer each other.'
A total of 26 initial public offerings of stock have been filed thus far this year, more than all of last year. In this week alone, six IPOs came from biotech and pharmaceutical companies. Among them are InterMune of Burlingame and IntraBiotics Pharmaceuticals Inc. in Mountain View.
All this bodes well for patients, not just investors and companies, said Levin. ``With 549 agents in the pipeline, biotech could have a major impact on the future of pharmaceutical productivity,' Levin said.
In the past year, said Incyte's Scott, ``there is building a critical mass in the industry. Information management will be the key to a revolution in productivity.'
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Contact Lisa M. Krieger at lkrieger@sjmercury.com or (408) 920-5565.
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