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Special back to school edition

Commentary: Special back-to-school edition

At least half the industry returns to work today from vacation. We may exaggerate somewhat, but nevertheless we hope the late summer break taken by many biotech investors and executives results in renewed energy for reviving biotech's fortunes. Because it's not overstatement to say that the shape of the industry fundamentally will be determined by management and investor actions during the next year or so.

Simply put, the next 12 to 18 months will provide telling evidence about the sector's ability to meet product milestones, and test whatever novel solutions are crafted against the realities of capital rationing.

Along those lines, this week we propose to review the common agenda for the home stretch of the year and into 1994. The emphasis is on the ultimate source of value creation in the sector - individual company performance - which is driven by a handful of key questions that every management and its board need to answer:

-- Is the current business model justified?

-- What are we doing to maximize the approvability of our product?

-- Are we focused on product marketability?

-- Are we showing investors a Clear Route to ROI?

-- Are we doing what needs to be done about preserving asset values?

The business model

To start with, the realist has to acknowledge that the externals - health care reform, investor sentiment, and industry structure - are outside management's individual sphere of control. Internally, management also has no control over whether the science ultimately can be transformed into products.

The question is how managers tackle issues where they

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