In earlier times, biotech's fundamental progress over the last 13 weeks could have supported the industry perhaps for an entire year. But investors generally turned their backs on the sector's achievements in the third quarter (see adjoining list).

The BioCentury 100 Price Level index was down 11 percent, while the 190 smaller cap companies in The Carson Life Sciences Indexes lost an aggregate $2.2 billion in market cap in the quarter. The top tier stocks continued to benefit, however, as investors looked for a safe haven within the sector. The 11 large cap stocks in The Carson Indexes gained $2.5 billion, increasing their aggregate value to $33.5 billion in the quarter.

(See the BioCentury Extra for Thursday, Oct. 3, for the complete data on 317 biotech stocks and 23 industry subgroups.)

However, the BioCentury 100 still is 27 percent above its level of August 1995, when the biotech rally began. And if the 9 percent rise in the index over the past four weeks continues to hold, the sector may get lucky and be able to close the books on a comparatively short four-month bear market. From its peak in late May through the end of the third quarter, the BioCentury index is down 22 percent.

Longer downturns

Sour markets in the past have been longer. After the Clinton administration's attack on pharmaceutical companies and an accompanying spate of company-induced setbacks, the BioCentury 100 lost a third of its value. In that market, it took five months before prices showed signs of turning. By that time the index had dropped to 845.16, about 31 percent below last Friday's closing level.