For biotechnology, 1998 was ¿the best of times and the worst of times¿ the best, as the industry matured further and made exciting scientific advances, and the worst (or nearly so), as all but the largest companies struggled to raise money in a flat market. It is a market no longer fueled by investors¿ indiscriminate enthusiasm, for the most part. In the laboratory and on Wall Street, biotechnology is growing up.

Among headline-making scientific findings in 1998 was the discovery of human stem cells. Disclosed late in the year, the finding sent Geron Corp.¿s stock skyrocketing. This development was almost unmatched for media attention to biotechnology. Much earlier in 1998, EntreMed Inc.¿s anti-angiogenesis research to fight cancer still being conducted in mice won widespread play in the general press and mightily boosted the company¿s shares.

Public, private and follow-on offerings in biotechnology netted about as much in 1998 as in the previous year, but both were far below 1996¿s level. ¿Selectivity¿ was the watchword, as investors gave ever more scrutiny to companies and their methods. Such conditions may explain the ¿opening of floodgates¿ (as one analyst put it) in mergers and acquisitions; firms consolidated and teamed up not only to thrive, but to survive.

In Washington, too, the apt metaphor used by onlookers was of a dam breaking, and floodwaters surging. The final days of the 105th Congress saw confirmation of Jane Henney as FDA commissioner and other debates related to patent reform, privacy and cloning questions.

The BioWorld Biotechnology State of the Industry Report 1999 thoroughly examines the scientific, financial and legislative areas in an increasingly complex (if also less volatile and more stratified) enterprise: the devising of profitable new therapies, using scientific methods hitherto unheard of.

As competition became stiffer and the economic pickings grew slimmer, biotechnology firms grew more sophisticated. Analysts say even more winnowing is likely to characterize the competitive years ahead, a tightened state of affairs calling for even more maturity by companies to match the shrewdness of those who fund them.

For the biotechnology firms that can stay in it, the race is on.

Randall Osborne