Bellwether thinking

The sentiment of European investors - both on the public equity side and the venture side - is remarkably negative when it comes to homegrown biotech, citing failed business models, thin pipelines and even thinner management. But even though Europe has yet to provide bellwethers on the scale of a Gilead Sciences Inc. or Idec Pharmaceuticals Corp., much less a Genentech Inc. or Amgen Inc., a cohort of companies in the U.K. and on the Continent are poised to take on the burdens of sector leaders.

In addition to being profitable or well capitalized, these companies have products on the market or in late-stage clinical trials, and they are looking to grow, both via internal R&D and purchases of products or companies. Even if only a handful succeed, the European biotech industry that emerges from the bear market of the past three years is likely to look far more robust than the industry that went into the bear market...