A Swooning Wall Street Is Tempered By Genetically Altered Products
San Diego’s biotech leaders are elated about Wall Street’s new biotech boom, but they feel altogether differently about a new biosafety treaty allowing the European Union to reject the import of bioengineered foods.
Biotech industry officials crammed Biocom’s Jan. 31 breakfast meeting to hear more news about the resurgence of investors’ interest in biotechnology. The association’s first meeting of the new century was held at the Hyatt Regency La Jolla.
First speaker Steven Engle, chairman and CEO of La Jolla Pharmaceutical Co. said out loud what appeared to be on everyone’s mind.
“It was a great year for earning momentum,” Engle said. “Internet money is starting to flow back into the biotech sector.”
La Jolla Pharmaceutical shares closed at $3.75 on Feb. 1, up 1,705 percent from as low as 22 cents in 1999. That marks a major turnaround after the company halted trials on its lupus drugs, following disappointing results, and let 41 of its 95 employees go to save cash.
Other local firms also made a dramatic comeback.
Among the biggest winners are Alliance Pharmaceutical Corp., with a 522 percent stock price increase from $2.25 in 1999 to $11.75 in January 2000.
Turning Toward Biotechs
Aurora Biosciences Corp. also saw its shares surge 740 percent from $4.84 in 1999 to $35.90 this month, and Amylin Pharmaceuticals’ shares rose a whopping 1,600 percent from 65 cents last year to $10.44 this year.
The Nasdaq Biotech Index almost doubled last year and is up 10 percent already this year, he added. Analysts agreed investors, their pockets full of money from Internet returns, have turned toward the biotech sector.
The biotech boom is welcomed after the long financing drought of the last few years. Many local biotech firms were left struggling after their investors fled to high-flying Internet stocks.
John Dobak, president and CEO of Sorrento Valley-based Innercool Therapies, is optimistic the hype will spill into the medical device sector.
Historically, medical device firms have lagged behind the biotechs by one or two years, he told the audience, adding, “There is plenty of venture capital money out there.”
Innercool, which develops a blood cooling catheter to selectively cool the brain, succeeded in raising $14 million within the last six months, he said.
Other local companies have been equally successful in raising money, he said.
San Diego-based Accumetrics Inc., which develops materials for cardiovascular medicine, recently raised $15 million, he said.
Innovative Medical Devices, which makes water purification and dispensing devices for pharmacies, raised $12 million, he added.
Jerry Caulder, chairman and CEO of Akkadix, a local agricultural biotech firm, however, couldn’t quite share the spirit.
He was disappointed over a Jan. 29 biosafety treaty that will require shipments of genetically altered crops to carry labels saying “may contain” GMOs, or genetically modified organisms. He described the accord as a “useless cause,” adding that such regulations become trade barriers, not scientific barriers.
Trade Vs. Science
Anti-GMO groups have long argued scientists have yet to prove bioengineered foods are safe for a person’s long-term health and the environment.
But supporters like Caulder say such arguments as based on “emotions, not scientific facts.”
“Many people don’t like us tinkering with plants,” Caulder said. “What they don’t realize it that ag-biotech has done so much good.”
GMO supporters argue the technology can help cut down the use of harmful pesticides, make foods like rice richer in vitamins and increase plants’ resistance to cold and salt.
But the industry has done a poor job in educating the public about these benefits, Caulder said.
