BioWorld Financial Watch has been tracking the price performance of biotechnology and biotech-related stocks on a weekly basis since the beginning of July 1994. Since Aug. 8, 1994 BioWorld Financial Watch has also published data indicating the average percent change of all the stocks listed on both a week-to-week basis and on a year-to-date basis.

For the stocks included in BioWorld Financial Watch's 1997 stock indicator, see the list on pp. 301-306. The graph on p. 312 plots the change in this indicator (the average percent change in the stocks, year-to-date) on a monthly basis throughout 1997.

Of the 302 stocks included in this list, the average percent change between 12/31/96 and 12/31/97 was -1.87 percent. Only 37 percent of the stocks (or 112 out of 302) gained value between the close of 1996 and the close of 1997. Another few (4 out of 302, or 1 percent) ended up the year unchanged.

By contrast, the 286 stocks that were included in this list for the calendar year of 1996 did better: they gained an average of 17.94 percent from the end of 1995 to the end of 1996. Also, a full 53 percent of the stocks either gained value in 1996 or ended the year unchanged. But 1995 was an outstanding year for biotech stocks. The 251 stocks that were included in this list for the calendar year of 1995 gained an average of 96.24 percent from the end of 1994 to the end of 1995; also, the vast majority of the stocks (81 percent) either gained value during 1995 or ended the year unchanged.

The BioWorld Stock Indicator measures the average percent change year-to-date in the 302 biotech and biotech-related stocks that are covered weekly in BioWorld Financial Watch. The Friday closing price of each stock on the list is compared either to its 1996 closing price (12/31/96) or its IPO price (if the stock started trading in 1997), and expressed as a percent change. Then the percent changes for all stocks on the list are added and divided by the total number of stocks listed. Because these averages are not weighted in any way, nor do they take into account the number of shares outstanding for each company on the list, they cannot be considered true indices. Instead, they serve as indicators of the sector's performance.

For comparison, we have also graphed the performance in 1997 of a standard index, the Nasdaq Biotech Index. This is comprised currently of 100 biotech stocks that are listed on Nasdaq. The index is market value weighted, with the representation of each stock in the index being proportional to its closing price times the total number of shares outstanding, relative to the total market value of the index.

Jennifer Van Brunt