The Buyside View, IV

Everybody guessed wrong last year, and nobody knows quite what to think this year. If 1995 was the "give up" phase of the bear market in biotech, when investors assumed there would be no near-term rewards for value-adding events at companies, going into 1996 the sector is balanced between overheating and the continued momentum of positive events.

On the plus side, there are a record number of products awaiting FDA approval - Cowen & Co. estimates 21 products are before the FDA, with 15 likely to be approved this year - and enough products in late-stage trials that it's become easy to lose track. Good news on the clinical and regulatory fronts, combined with continued interest in partnering by pharmaceutical companies, will unequivocally justify increasing valuations...