That is by no means the most devastating loss stemming from a biotech failure in the '90s. And these aren't isolated cases. Viren Mehta, a biotech expert at Mehta and Isaly, keeps track of biotech bombs. He says there have been 14 major disasters this decade. But even if you avoid specific product failures, it isn't enough.
Biotech stocks fly in swarms.
The whole group gets clipped when a few failures surface. The average biotech stock has doubled in two years and reached a four-year high. Following the cloning news out of Scotland, investors indiscriminately bid up stocks of cloning companies. There have been some genuine commercial successes, such as Biogen Inc.'s drug Avonex, approved last year to treat multiple sclerosis. Still, a dangerous froth is forming.