But biotech is really just going through some growing pains. The spate of failures, which caused the stocks’ slide, doesn’t mean long-term trouble for the industry. After all, with 350 new drugs in trials–more than ever before–it’s inevitable that failures will occur, industry experts note. Biotech’s high payoffs have always come at high risk, and the industry has hit this kind of snag before. Every time, it’s rebounded.
Though biotech refers to a wide variety of life-science products–from genetically modified foods to micron-size drug-delivery devices called MEMs–the industry is essentially made up of small firms searching for medicines based on large molecules like proteins and DNA, a class of possibilities generally ignored by the big pharmaceutical companies. The industry, once considered a white-hot field like information technology in the late ’90s, has blossomed over time, and now employs more than 100,000 people in the United States, mainly in cities like Boston and San Francisco.
With so many drugs in trial stage, the industry has opened up more to people without “Ph.D.” or “M.D.” after their names, such as nurses with chemistry backgrounds who can communicate with both patients and researchers. Firms that have passed their trials are also hiring factory workers en masse. When ISSYS, a firm that develops MEMs, starts production next year, it will double its work force to 50. “Manufacturing isn’t sexy,” says biotech recruiter Mark Hoffman. “But more and more of these companies are no longer just about lab work.”
As they go beyond the lab, the best firms are learning from their predecessors’ mistakes. Take Esperion Therapeutics. Instead of seeking cures for chronic diseases, with their long trial periods, it focuses on acute cardiovascular ailments, which yield accurate trial results fast. If it fails, it should have no trouble getting bought by Big Pharma. But it has grander ambitions. “We’re a bridge” to a big pharmaceutical company, says founder Roger Newton. “The opportunities within biotech are just going to continue to grow.” And if biotech stocks jump again, that should provide a real booster shot of optimism to the field.
