If executives at development stage biotechnology companies are frustrated by the lack of quantitative measures of corporate value to show investors, last week's hosing of the industry's new earnings stories served as a reminder of the "tough love" the Street applies to companies that reach the holy grail of sales and earnings.

It didn't take long for the market to cast its vote after PathoGenesis (PGNS) announced that it expects lower than anticipated first quarter sales of TOBI tobramycin to treat pseudomonal lung infections in cystic fibrosis patients. The stock lost $22.5625 (65 percent) to $12.1875 on Tuesday on 22.1 million shares.

PGNS, which hopes to issue its final first quarter numbers next month, attributed the TOBI shortfall to sales that were booked in the fourth quarter of 1998, instead of in 1999 as anticipated. However, the product also may be encountering unanticipated prescribing patterns that could have contributed to the disappointing numbers (see A4).