Our panel of experts answers your mutual fund questions. Despite skyrocketing stock prices, many companies show little in the way of profit. Spurred by a dazzling array of new healthcare products, plus the mapping of the human genome, the US biotechnology industry is booming. Many biotech companies, such as Genentech, Amgen, and Biogen, are increasingly becoming household names. Stock prices have soared, and investors are scrambling to get on board.
Revenues are thin at many firms.
Moreover, some investment analysts fret that we could see a repeat of what happened to the industry back in the 1990s, when the sector boomed early, only to bust by the mid-90s. Just last week, biotech stocks took an unexpected hit after reports emerged that the US was planning to restrict patents on genes. Such a move would likely put the brakes on several biotech companies' plans to pursue gene-based inventions. The reports, however, turned out to be false. Yet the market's reaction to them underscores the volatility of this sector.