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Agbiotech's been in the doldrums for yonks but now the rest of the sector has started taking a beating. An analyst with the pharmaceuticals research firm Mehta Partners in New York comments that investors

"...are now realizing that biotechnology companies have a lot in common with the 'dot-bombs'. They're very good at burning through cash and not showing a profit at the end of the year."

3 items - thanks to Karly Graham for 1, and Lucy Michaels for 2 and 3:
1. 'The criminals of capitalism' - Le Carré on corrupt pharma-power
2.  Biotechnology sector gets sinking feeling - Financial Times
3.  Corporate Watch's briefing on Dalgety Agriculture
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1. Excerpt from John le Carre piece 'The criminals of capitalism', re his latest book The Constant Gardener.

'Do we ever stop to wonder what happens to suppposedly impartial academic medical research when giant pharmaceutical companies donate whole biotech buildings and endow professorships at the universities and teaching hospitals where their products are tested and developed?  There has been a steady trickle of alarming cases in recent years where inconvenient scientific findings have been suppressed or rewritten, and those responsible for them hounded off their campuses with their professional and personal reputations systematically trashed by the machinations of public relations agencies in the pay of the pharmas.

'In the Constant Gardener I made an amalgam of these unfortunate cases and called them Lara.  She is a chemical research scientist in Canada, hounded by the pharma giant that hired her, and by the academic colleagues whose livelihoods, like hers, depend on its favour.  Multiply those concerns by tens and you begin to understand the corrupting power of pharmaceutical companies when they operate in emerging countries and can delegate huge slush funds to local "managers" who know how to get a drug accepted by local officials and ministers'.
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2. Biotechnology sector gets sinking feeling
By Victoria Griffith in Boston
in the Financial Times (9th January 2001)

Biotechnology stocks have lost 25 per cent of their value in the last two weeks, prompting fears of a bursting bubble in the sector.

The Nasdaq biotechnology index fell from 1200 in the final week of December to about 900 in mid-day trading Tuesday. While biotechnology stocks were up slightly Tuesday compared with Monday, the damage to the sector is worsening. Since its March peak, the industry index has collapsed 45 per cent.

Analysts worry the sector may decline further, as investors increasingly question lofty valuations. Like internet companies, most biotechnology groups lose money. Even with the latest market downturn, profitable biotechnology companies - there are an estimated 20 to 25 - are carrying exorbitant price-to-earnings ratios. Genentech on Tuesday was valued at about 120 times earnings, while Immunex trades at nearly 150 times earnings.

The exuberance that surrounded the completion of the sequencing of the human genome last year led to a rapid run-up in biotechnology stocks. Between November 1999 and March 2000, the Nasdaq biotechnology index tripled, with biotechnology companies initially seeming immune from the sell-off in technology stocks. In a year during which the Nasdaq Composite Index posted its worst performance ever, the biotechnology component of the index rose 15 per cent.

But now investors fear genomics will not speed up the discovery and development of drugs as quickly as many had expected. Earlier this week, Genentech's chief executive Arthur Levinson warned investors that the sequencing would not translate into shorter development time for new drugs. No matter how promising, potential drugs still must be tested in laboratories, and human clinical trials and regulatory procedures continue to be burdensome.

"A lot of retail investors got into this sector with the false hope that brand-new drugs were just one or two years away," says Yi Ri, an analyst with the pharmaceuticals research firm Mehta Partners in New York. "They are now realizing that biotechnology companies have a lot in common with the 'dot-bombs'. They're very good at burning through cash and not showing a profit at the end of the year."

Much of the run-up in biotechnology shares was fueled by retail investors. Biotechnology chief executives, used to conversing with institutional buyers, suddenly found themselves at investor meetings addressing retail investors with a very limited understading of their technology. "We have to do a lot of hand-holding," says Joshua Boger, chief executive of Vertex Pharmaceuticals.

The biotechnology frenzy also triggered a spate of initial public and secondary offerings. Last year the sector raised a record $40 billion in capital. The capital influx has left some biotechnology companies flush with cash. Genomics companies such as Human Genome Sciences has $1.7bn in the bank, enough to survive nearly 15 years without turning a profit, while Millennium Pharmaceuticals has $1.4bn in cash.

Some of the newer and weaker start-ups, however, may soon be forced to shutter their operations. "Six months ago, there were a lot of bad companies launching on the market," says Eric Schmidt, biotechnoloy analyst at SG Cowen. "It won't be a bad thing to see them go."
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3. Re: Corporate Watch's briefing on Dalgety Agriculture

Hi folks

The Dalgety Group has now sold off its entire animal feed business mainly to Advanced British Nutrition (ABN), which trades as J Bibby Agriculture, a subsidiary of Associated British Foods PLC . This briefing is therefore out of date.

So at this highly critical time for campaigning on the GM animal feed issue, please focus your energies on persuading the major animal feed manufacturers (BOCM Pauls and ABN) the big international grain traders (Cargill and ADM) and, of course, the supermarkets, to go GM free.

Lucy Michaels  <This email address is being protected from spambots. You need JavaScript enabled to view it.>