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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: hlpinout who wrote (96116)	3/15/2002 6:52:30 AM
From: hlpinout	Respond to of 97611

Capellas: Biotech Slow-Moving But Potentially Lucrative By Barbara Darrow, CRN Boston 12:04 PM EST Thurs., Mar. 14, 2002 Biotech may be a hot new sector, but it will progress slower than Internet speed, Compaq Computer Chairman and CEO Michael Capellas said Thursday morning. "It takes 12 years and $800 million to bring a new drug to market, and one-third of drugs fail in testing. There are long cycles and high failure rates," Capellas told attendees of BioITworld, held here. Huge research and logistics problems remain in marrying mathematical skills to computer-science expertise, he said, citing a decrease in the number of college graduates with computer-science and math degrees. "The number of computer-science grads has declined for seven consecutive years," he said. His concerns, echoed by show attendees, inject some caution into the hype surrounding biotech. New IDC numbers predict the BioIT market--IT technologies being sold specifically into companies conducting biotech research and development--will soar at a a compound annual growth rate of 24 percent to nearly $38 billion in the next four years. Biotech, pharmaceutical and research companies are expected to spend big on storage, servers and network infrastructure, according to the research. That is doubtless one reason a bevy of high-tech companies, including Compaq, Oracle, Sun Microsystems and EMC, are targeting biotech as a potentially lucrative market for their goods and services. Venture capitalists reeling from the dot-com bust are likewise seeking higher, drier ground and are circling biotech opportunities. However, those investors who became used to fast-turnaround paybacks will not see them repeated in biotech, observers said. The challenges are numerous. One major issue is determining how to tie an individual patient record into the whole biotech ecosystem, which includes research and academic institutions, genomic companies, agribusiness and technology suppliers, Capellas said. The data is out there, but it is distributed around the globe in "different forms and factors, across business models and organizational walls," he said. Capellas cited Compaq's own collaboration with The Diabetes Association and Entelos as an example of partnerships geared to solving particular medical problems. "There must be collaboration between the government, academia and industry. Nobody can do it all," he said. Computational lessons already applied in mechanical engineering will increasingly find their way into biotech research, he said. "We have to bake in simulation, much as [what] happened in the automotive industry where we used to mechanically build and stress-test parts. Now the whole thing is simulated before any material is actually applied. That cuts time to market and costs. Better yet, you don't get 90 percent down the curve and find out the part doesn't work," he said. "We're now applying simulation to prosthetic devices not only in general but [also] in individual cases." Capellas said the real biotech "home run" will be when researchers can test the effects of multiple parameters including aging and simulate the end result of a given condition or drug. Capellas, who along with Hewlett-Packard Chairman and CEO Carly Fiorina is trying to shepherd through a controversial merger of the two computer giants, said the combined company would marry HP's expertise in large data-center computation and systems management tools with Compaq's supercomputing clusters and advanced file-system work. "We could take their commercial Unix and our supercomputing [expertise] and achieve higher critical mass on the high end," he said.