BioCentury
ARTICLE | Finance

Ebb & Flow

February 4, 2002 8:00 AM UTC

With the Enron scandal raising sensitivity to complicated accounting practices, biotech companies with less than plain vanilla P&Ls can expect increased scrutiny, and investors are likely to sell first and ask later. First hit was Elan, prompted by a Wall Street Journalarticle on Wednesday that raised old questions about how ELN books revenue for its many joint ventures.

The magnitude of ELN's loss on the week - the company shed $2.2 billion, or 19% of its market cap - clearly shows the market's current distrust. ELN is now valued at $9.7 billion...