The health and happiness of the biotech industry has been predicated on a never-ending flow of private and public monies to finance young, loss-making companies. This equation has encouraged academic scientists and their venture backers to turn young technologies into companies at an impressive clip. But when the spigot is turned off, the result may be something like a 100-car pileup in the fog.

As BioCentury recently noted, of the 298 companies that raised money during the high-flying 1995-96 funding window, at least 94 now have less than $20 million in cash (see BioCentury, Sept. 8). The $20 million figure is a reasonable proxy for two years' worth of funds - the time frame in which companies need to start worrying about raising money - given that annual net losses for therapeutics companies average about $9 million, according to Ernst & Young.