Party Like It's 1999
4/1/2008 1:32:57 PM
Party Like It's 1999|
Ooh, don't you just hate feeling like you're missing the party? I remember being at a biotech conference near the end of 1999, wearing a name badge from a dotcom company I'd recently joined. Other attendees from-plain vanilla biotechs without real or trumped-up online "strategies" openly expressed their jealousy about my three-latter suffix. It's not that biotech wasn't doing just fine--the sector had been soaring right along with high-tech and anything Internet. But even the wizards on Sand Hill Road couldn't pump out a new biotech company from conception to IPO in a few months, and biotech wasn't creating so many headlines about overnight millionaires. For a moment, I felt kind of hip. It was an odd sensation.
Well, I got mine a year or so later when my company went belly up. But that's another matter. Right now, I sense again a little of that tech envy in the air. The NASDAQ just hit new highs for the year, levels not seen since...well...1999 (on the way up) and then 2001 (on the way back down). Meanwhile, the AMEX and NASDAQ biotechnology indices, while up for the year and doing just fine, are lagging well behind the NASDAQ composite...behind the AMEX computer technology index...and even behind the stodgy Dow.
That barest hint of malaise comes from more than a mere stock chart, though. It's Amgen's troubles with Aranesp. It's numerous restructurings and layoffs. It's activist shareholders gutting the likes of PDL Biopharma and selling the scrap at a sidewalk sale. Some stock prices are higher only as the result of a lot of pain.
So maybe not everyone is in the mood to party. But there's plenty of reason to feel cheery about what's going on in the industry. Venture Capitalists have stopped exclusively funding companies that only in-license compounds and are actually backing real R&D again. Early-stage companies continue to be bought out for huge sums. And an IPO window is showing signs of receptivity to medtech companies once more.
So don't envy your Silicon Valley friends. Med-tech is still where it's at. (Then again, maybe we should all be jealous of those hot, hot solar energy companies. Anyone have a business plan for biologically active solar panels?)