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What’s got no profits and a sky-high stock price? If you said “the latest dot com,” guess again. This time it’s the dozen leading companies in genomics research. Since December, firms including Gaithersburg, Md.’s Gene Logic and New Haven’s CuraGen have seen their stocks soar as investors tune into what scientists have known for a while-genome research is the future of medicine.

Driving the surging stock prices is the impending completion of the international Human Genome Project. In December, academic teams announced that they have decoded one of the 23 human chromosomes, with a rough draft of the rest of the genome to follow this year. And growing media coverage is drawing attention to companies that specialize in interpreting gene data to speed the search for new drugs-a field known as functional genomics.

“Investors are looking for places to put their money where there is an opportunity to change the world,” says Bill Hockett, director of investor relations for Salt Lake City’s Myriad Genetics, whose stock has seen a 400 percent increase over the last four months. Hockett thinks another draw is that genomics companies offer a mix of information technology and biology, which appeals to investors who’ve seen big gains in Internet and software stocks. At Myriad, for instance, gene scientists rely heavily on technologies with an IT flavor such as bioinformatics and DNA chips.

But can these stocks continue to defy gravity as Internet ones have? Some Wall Street watchers don’t think so. Jim McCamant, publisher of the Medical Technology Stock Letter, notes that many of these companies don’t have clear plans to turn a profit and face complex intellectual property issues that investors don’t appreciate. He points to Celera Genomics, the profitless 1998 startup that is racing to create a private copy of the human genetic code and whose market value has soared to $6 billion. “As a group,” says McCamant, “I think these companies are overvalued.”

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