SAN FRANCISCO -- Genomics, genomics, genomics was all the rage as execs from 250 online healthcare and biotech companies walked the catwalk for potential investors.
"The sequencing of the human genome is going to be a milestone in the history of mankind," said Dr. Alex Barkas, a managing partner of the Palo Alto-based Prospect Venture Partners. "And it's going to invigorate what already looks to be a great year for biotech."
The gold fever surrounding genomics -- the biotech niche that aims to discover how our genes control health and disease -- was buoyed by Monday's announcement that biotech heavy hitter Celera Genomics sequenced more than 90 percent of the human genome and expects to have a complete map later this year.
At the Chase H&Q Healthcare Conference solicitations from online healthcare sites have also been featured, but Tuesday's lineup presented a bevy of biotech companies -- including Genentech, Genzyme, and Affymetrix, along with wonkier, more obscure outfits like Microcide and Inflazyme.
Conference rooms were filled to capacity with money managers and investors, straining to hear biotech execs wax poetic about areas such as neurostimulation, anti-cancer molecules, and bacterial and fungal essential genes.
An earful of advanced biochemistry and stats about growth potential seemed to be just what investors wanted to hear, as many expressed giddy confidence in the future of the biotech industry, whose stocks have been rising since October.
"It's a little like the Net," Barkas said. "There's a land rush in terms of who's going to benefit most from the sequencing of the genome. Everybody assumes that the people who get in early will benefit most."
But the industry's recent surge is only half the story. While Silicon Valley tech companies have enjoyed meteoric successes in the past few years, biotech firms have been largely ignored by investors. Financiers were skeptical of companies that often saw little profit in products that -- if they worked at all -- often took ten years or more to bring to market.
Now, investors flush with Net cash have taken another look at biotech, and they like what they see.
Andrea Edelstein, a senior director for issuer services at the Nasdaq-Amex Market Group, said expectations are rising for biotech, now that companies have begun to prove themselves on the market.
"People are starting to realize that it's not just about the one-hit wonders," she said. "There are a lot of strong products on the market. There's a lot of hope."
But some investors remain unconvinced by the biotech buzz. Jim Foley, vice president of business development for pharmaceuticals giant SmithKline Beecham said he's not going to bet on anything just yet. "These companies talk a lot about genomics, but it's still a promise waiting to happen," he said.
Foley said he was skeptical of the routine promises rendered in many of the biotech pitches. "These investor presentations are biased toward the companies, and if one in ten of these companies make it, it'll be great."
Barkas, on the other hand, argued that the biotech firms featured at the conference all had an excellent shot at triumph. "You don't have to have a product on the market for people to have confidence in a company," he said. "They wouldn't be here if they weren't going to be a success."
