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To: allen menglin chen who wrote (76)	3/16/2000 8:00:00 AM
From: Tom Hua	Read Replies (3) \| Respond to of 443

Allen, the sell side analysts will be working overtime to save biotechs. There's too much at stake for them. The media will continue to "correct" the misunderstanding triggered by Clinton's announcement on Tuesday. Regards, Tom March 16, 2000 Plunge in Biotech Stocks Linked to Press Briefing By ROBERT LANGRETH and BOB DAVIS Staff Reporters of THE WALL STREET JOURNAL Tuesday's biotech-stock rout stemmed from a bungled briefing by the White House press staff that resulted in mistaken reports that President Clinton was about to restrict patents on individual genes. Most biotech stocks bounced back Wednesday as investors realized that the president's announcement merely affirmed existing policy and had no direct effect on most of the industry. But Celera Genomics Group and several other gene-mapping stocks were down amid lingering investor suspicion that the president's statement signaled that the government may gradually tighten its standards on gene patenting, hurting companies such as Celera and Incyte Pharmaceuticals Inc. that have filed gene patents based on limited information about what the genes do. Celera shares fell $8, or 5.2%, to $146 in 4 p.m. New York Stock Exchange composite trading. Incyte skidded $17.50, or 12%, to $126 on the Nasdaq Stock Market. The president's joint announcement with British Prime Minister Tony Blair had actually been in the works for months. It was intended to confirm a longstanding policy that federally funded researchers must release gene sequence data to the public as soon as they find it. The White House had been waiting for the right occasion to release the declaration, and Tuesday's Medals of Science and Technology award ceremony seemed perfect. Inauspicious Timing But the timing wasn't perfect. By coincidence, the presidential declaration came only two weeks after negotiations between Celera and the government-funded Human Genome Project, aimed at forming a collaboration to decipher the human genetic blueprint, bogged down. Both the Genome Project and Celera are racing to be the first to decipher the human genome, and tensions between both sides are running high. Things started to go seriously wrong when White House spokesman Joe Lockhart briefed reporters early Tuesday and said the president planned to restrict genetic patents. He said that in an interview with Peter Maer of CBS Radio News at 7:25 a.m. Eastern time and also in the press "gaggle" at around 9:30 a.m. (The gaggle is an off-camera meeting of reporters who cram into Mr. Lockhart's office.) At 9 a.m., Mr. Maer reported: "CBS News has learned that President Clinton later Thursday will unveil an agreement with Britain to ban patents on individual genes." At 10 a.m., he altered that slightly, reporting: "President Clinton will announce a new agreement with Britain on a statement of principles urging a ban on patents on individual genes." The Associated Press also carried a story that paraphrased Mr. Lockhart as saying genes can't be patented. Attempting to Recover The White House spent the rest of the day trying to recover. During a 12:45 p.m. press briefing, White House Science Adviser Neal Lane said, "I want to also make it clear the statement is not about patents or what should or should not be patentable." But by this time it was too late, and stocks of numerous biotech companies had begun to plunge. For his part, Mr. Lockhart said he had told reporters in the morning that "there were some things that you can't patent and a lot of things you could." But he allowed that the entire subject "was confusing," and he had asked Mr. Lane and another government scientist to address the issue in the afternoon to clear up the confusion. Wednesday, investors remained concerned, despite denials from government officials, that the White House statement represents the beginnings of a policy shift toward patenting genes. For months, academic researchers have been lobbying the government to tighten standards on gene patenting, so that genes can be patented only when researchers have a full understanding of their function. But many gene patents filed by companies such as Incyte and Celera fall into a gray area in that the companies have only a vague idea of the function of the genes they have discovered. "The statement is vague, but I think it is a signal" that the standards regarding gene patents will gradually be tightened, said one gene researcher familiar with the matter. The president's announcement was the result of months of behind-the-scenes preparations. The idea first came up in talks between Mr. Lane, the White House science adviser, and top British science officials, including Robert May, last summer. Drafts of the announcement have been circulating through federal agencies for months, but the president's busy schedule delayed the release until now. Write to Robert Langreth and Bob Davis at robert.langreth@wsj.com and bob.davis@wsj.com