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Brief History of Biotechnology |
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The term "biotechnology" was coined in 1919 by Karl Ereky, an Hungarian engineer. At that time, the term meant all the lines of work by which products are produced from raw materials with the aid of living organisms. Ereky envisioned a biochemical age similar to the stone and iron ages.
A common misconception among teachers is the thought that biotechnology includes only DNA and genetic engineering. To keep students abreast of current knowledge, teachers sometimes have emphasized the techniques of DNA science as the "end-and-all" of biotechnology. This trend has also led to a misunderstanding in the general population. Biotechnology is NOT new. Man has been manipulating living things to solve problems and improve his way of life for millennia. Early agriculture concentrated on producing food. Plants and animals were selectively bred, and microorganisms were used to make food items such as beverages, cheese, and bread.
The late eighteenth century and the beginning of the nineteenth century saw the advent of vaccinations, crop rotation involving leguminous crops, and animal drawn machinery. The end of the nineteenth century was a milestone of biology. Microorganisms were discovered, Mendel's work on genetics was accomplished, and institutes for investigating fermentation and other microbial processes were established by Koch, Pasteur, and Lister. . . |
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Are Biotechs Worth the Risk? |
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Investing in stocks of emerging biotech companies is a tough way to make money. The biggest risk, of course, is the arduous and expensive process of getting a drug through the FDA clinical trial process -- a gauntlet that only a small percentage of drug candidates survive. A nasty setback for a late-stage drug can often cause a biotech stock to lose half its value in a heartbeat. But even for those companies that succeed and get multiple drugs to market, a decent return for shareholders willing to shoulder the risk isn't a foregone conclusion. I've learned this lesson from personal experience, and I'm going to share it with you today. The hunt for the next Amgen
My interest in biotech investing began in 1998, when I began developing a framework for the sector that I thought would help me find the next Amgen (Nasdaq: AMGN), which had ridden two blockbuster drugs to billions in profits and turned the stock into a 100-bagger in 10 years. Find one Amgen, I thought, and you are set for life. My research eventually drew me to a little company called Ligand Pharmaceuticals (Nasdaq: LGND), a company with some newly approved products and a great R&D pipeline. The stock was then about $13 per share.
Yesterday, Ligand closed at $7.86 per share, or about the going price of the stock way back in August 1998. The lesson here isn't that Ligand has been a failure as a company; rather, that the stock has gone nowhere in six years despite considerable commercial success. . . |
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