Biotech investors may be excused if they are hoping that the new year will bring a change from the dismal fourth quarter just completed. After hitting a high for the year of 1184.14 on Oct. 10, the BioCentury 100 index finished 1997 at 953.2, down 3 percent on the year and 15 percent on the quarter. That wasn't as low as the nadir of 835.62 on April 25, but is still sufficiently grim to give investors pause about a sector that continues to lag the NASDAQ composite.

Compared to biotech, the broader market indices fared much better. Leading the charge was the S&P 500, which closed the year up 31 percent despite a mere 2.4 percent gain tinged by the so-called Asian flu in the fourth quarter. The Dow Jones Industrials lost 0.5 percent in the quarter to close the year up 22.6 percent, and the NASDAQ Composite still closed the year up 21.6 percent after a 6.8 percent drubbing in the last quarter (see A3).

Even if the industry gets the traditional bump from the 16th Hambrecht & Quist Healthcare Conference next week, the question remains what key events will drive the sector out of its malaise.

To help sway investor sentiment, the industry is providing at least 40 pivotal milestones in the first half of the year (see A6). While members of the Street community were cautious about predicting a complete turnaround, several suggested to Ebb & Flow that the spate of milestones could lend support to an oversold group.

Kurt von Emster, portfolio manager for Franklin Templeton Distributors, is betting on help from an NDA filing by Zonagen (ZONA), which will include new data for its Vasomax erectile dysfunction product. He also likes the chances of GS 4104 flu data from Gilead (GILD), and is betting on a positive FDA decision on Cor's (CORR) Integrilin platelet blocker.