
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, May 28, 1995                   TAG: 9505270002
SECTION: BUSINESS                    PAGE: F2   EDITION: METRO 
SOURCE: ASSOCIATED PRESS
DATELINE: SAN FRANCISCO                                 LENGTH: Medium

SHOPPING SPREE BY BIG DRUG COMPANIES MAY BOOST BIOTECH

Mainstream pharmaceutical companies are going on a bargain-basement shopping spree in the nation's beleaguered - but scientifically promising - biotechnology industry. Experts say the bailout may signal that biotech's financial recovery is finally beginning.

``This sector will provide the future of therapeutics, but it has shifted in a big way to `big pharma,''' said industry analyst Howard Wachtler of Medical Venture Holdings Inc. in New York. ``It's what's kept the industry going.''

The nation's 1,200 biotech companies, already short of cash in their expensive quest to manufacture genetically engineered therapies, staggered last year under the failure of nearly a dozen high-profile drugs. After 10 years of investments, biotech companies have managed to bring just 29 drugs to market - albeit some breakthroughs like the first treatments for cystic fibrosis and multiple sclerosis.

Although the industry has 270 biotech drugs now in human trials, Wall Street investors have pulled their funding in favor of safer bets. But in January, the pharmaceutical industry flocked to bail out these companies.

Mainstream drug-makers invested $1.4 billion in biotech companies in the first quarter of this year, 10 times the amount they invested during the same period in 1994, the investor relations firm Feinstein Partners Inc. reported last month. Stocks brought in just $207 million, down from $692 million in the first quarter of 1994, Feinstein Partners found.

In just three months, drug giants infused 24 biotech companies with enough cash to carry them for several years, the report said.

It makes more sense to help along cutting-edge technology in return for a share of the profits than to build the infrastructure necessary for new genetic techniques, Richard Koenig of pharmaceutical leader SmithKline Beecham said.

SmithKline has invested in at least five biotech companies, and Ligand Pharmaceutical Corp.'s pursuit of drugs to grow blood cells is its latest interest. ``The idea is to get in early on very new, leading-edge technologies,'' Koenig said.

But the upturn doesn't mean biotech is out of the woods, cautioned Karen Bernstein, editor of BioCentury, a newsletter that tracks the industry. At the same time, attempts to lower health care costs are making hospitals slower to accept expensive biotech drugs, she said.

Bernstein investigated ReoPro, Centocor's drug that dramatically reduces blood clots during angioplasty, a procedure where a tiny balloon clears blockages in heart arteries. The drug, recommended for 30 percent of angioplasty patients, costs $1,350, but over six months saves up to $1,200 in follow-up care.

But Bernstein found hospitals reluctant to shell out the hundreds of thousands of dollars needed to offer ReoPro to all angioplasty patients, opting instead to save the drug for those most at risk of blood clots.

``The bottom line for companies will be a slower sales ramp-up and potentially a lower penetration of the market,'' she warned.

by CNB