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Highs and Lows

As stock prices and drug approvals are up, biotech seems to be booming, but as the New York Times' Andrew Pollack writes, some in the industry are taking a cautious view because of past experiences.

For the past few years, Pollack notes that biotech stocks have outperformed the broader market, and last year, some 110 companies went public to raise $9 billion. At the same time, large drug companies are buying up smaller ones and the US Food and Drug Administration is approving more drugs.

"It is an incredibly exciting time for our industry," Robert Hugin, the chief executive of Celgene, said at the JP Morgan Healthcare Conference, later adding "this is not hype and smoke and mirrors."

Others, though, are worried that the pace will slow, Pollack says. "I have my seatbelt and crash helmet on," an anonymous biotech chief executive tells the Times.

Last time the industry was doing so well, Pollack writes, was around 2000 when companies and investors were pinning their hopes to the coming human genome sequence to change drug discovery. When that didn't go as planned, stocks fell and some investors closed up shop.

But this time, some say it's different as there's more substance — and more years of research — behind the claims.

"I would never have predicted what's happened in the last 18 months," says the University of Pennsylvania's James Wilson, who is a founder of the gene therapy company RegenXBio. Wilson adds, though, that some investors and companies are overlooking some of the challenges.

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