The biotechnology industry raked in billions of dollars from investors last year as it basked in the spotlight of one of science's great achievements, the sequencing of the human genome. This year, investors will expect the industry to show what can be done with both the genome and the money.
It is in one sense an artificial turning point, given that many companies already were making tools to manipulate databases of genomic information, allowing them to find genes important in regulating disease. Some, such as MedImmune Inc., already manufacture and sell proteins that are used as drugs.
But this year, experts say, there is no question that investors are expecting more signs of maturity from biotech companies. Established companies such as Baltimore's Guilford Pharmaceuticals Inc. plan to push more therapies into human testing, broadening their drug portfolios and lessening their dependence on the success of any single therapy. Big companies flush with cash will find ways to spend it, in some cases acquiring products or buying other companies.
Companies that make tools used by scientists studying the gene-based engines of living things, such as Rockville software maker InforMax Inc., will look to refine and expand their offerings. And little companies such as Gaithersburg-based Avalon Pharmaceuticals, a cancer-therapy researcher bolstered by private capital raised in 2000, will begin to show whether their big ideas about how to use genomic information hold enough promise to pay off.
"This $40 billion is going to change the way the industry behaves and put some life back in the survivors," Kenneth B. Lee Jr., an Ernst & Young managing director for corporate finance and a leader of its health sciences group, said of the money he estimated was raised by biotech companies last year. To be sure, there are some among Maryland's 250 biotech companies that headed for year's end in dire need of cash. EntreMed Inc., a developer of anti-tumor drugs, had six to eight months worth left as it scouted for the right deal to make with a larger pharmaceutical company. Osiris Therapeutics Inc., a Baltimore-based developer of therapies to regenerate human tissue using adult stem cells, said it had about six months worth of money left as the year drew to a close. And GenVec Inc., a developer of gene therapies, had to settle for tens of millions of dollars less than it had planned in a year-end stock offering, thanks to a down market.
