Last year was the year investors discovered genomics. Retail and momentum investors fell in love with the group, dragging along dedicated, fundamental biotech investors who may have known toolkit companies were overvalued, but also knew they had to play in the field to keep their investors happy.

But if biotech stock performance was bifurcated in 2000, with the toolkit group out-performing the product group, results are likely to be reversed this year, with product companies out-performing the tool plays. The news flow should be particularly good for product companies in the second half, while tool companies must prove they can do enough deals to justify their valuations.

Sideways market

The overall economy will provide a significant amount of noise.