US BIOTECH shares have fallen 33 per cent since January 1 and many firms face the dismal prospect of going out of business, if investors continue to shy away, afraid that drug price reforms will weaken the industry's profitability. Further deterring investors are US President Bill Clinton's public criticism of the high price of drugs and that clinical trials of two high-profile drugs produced by the biotechnology industry have yielded poor results.

Biotechnology firms have to rely greatly on equity capital and chief executives in the industry are appalled by the lack of public support from Clinton. "Many of the things that Clinton has been rightly or wrongly accusing pharmaceutical manufacturers of, are not true of biotech," says Stephen A Duzan of Immunex Corp in Seattle in a newspaper interview.