Bio Products In USA Generated At "Unprecendented Rate"

The biotechnology industry is generating new products at an"unprecedented rate" that should continue in 1998, according to David Crossen and Scott Sacane, industry analysts for US broker Montgomery Securities.

Although 25 drugs have failed late-stage clinical trials so far in 1997, Mr Sacane noted that there have been 10 late-stage successes leading to new drug approvals in the following year, with the same number again the year after. This has led to a rise in the biotechnology index on Wall Street of 35% since the beginning of August, with some stocks doubling or tripling in value.

Making their comments at an investment conference in San Francisco, California, Messrs Sacane and Crossen said they were hard-pressed to find a fundamental reason for the recent strength of the group, especially in light of the unusually high number of clinical failures this year. Given that there were no key product approvals or other significant news to drive prices, Mr Sacane suggested that recent heavy inflows into health care mutual funds may be behind the rising stock prices.