For the middle-aged among us still able to remember the days of Catskill humor, the comedian Alan Sherman wrote a set of lyrics that could epitomize the experience of biotech investors in 1996 and their hopes for 1997:

"God rest ye merry gentlemen, let nothing you dismay,
Dis May you had a rotten month, so what is there to say,
Let's hope next May is better and good things will come your way,
And you won't have a feeling of dismay, next May."

Biotech investors are, of necessity, optimists. The sector was flat for 1996, yet by any measure, the group made fundamental progress last year, with more companies making money, more products approved, more awaiting approval, and more advancing through clinical trials. For its fifth annual review of investor sentiment for the new year, BioCentury asked institutional investors when, and how, that will be reflected in stock prices.

The problem for biotech is that it exists in a broader environment, where investors have multiple options of where to put their money. Thus 1996 was a year of contradictions for the industry

A letdown