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— Biotechs in the gene field such as Corautus Genetics, Diversa, Genetronics Biomedical, Sequenom, Isis, and Illumina continue in the red. Last Thursday, Illumina settled a potentially damaging patent-infringement lawsuit, and its stock rose. It expects its losses to accelerate next year. Genetronics, a consistent money loser since 1995, is now focusing its efforts on cancer. Diversa is a consistent money loser, but Standard & Poor's puts it in the top 38 percent of companies it ranks. Sequenom recently slashed employment. Isis Pharmaceuticals is in Standard & Poor's bottom 8 percent, although an experimental anti-cholesterol drug may be promising.

Some biotechs, touting their anti-terrorism technologies, are considered homeland-defense stocks; Vical is developing an anthrax vaccine. But it has a $129 million cumulative deficit. Aethlon Medical says it is developing products for biological warfare. As of March 31, it had only two full-time employees.

Don't put money in a stock for an emotional reason -- say, a company working on a disease that killed a family member. Among some of the money losers are Vista Medical, tackling morbid obesity; Maxim Pharmaceuticals, battling leukemia; Amylin, working against diabetes; Avanir, taking on central-nervous-system disorders; Arena Pharmaceuticals, concentrating on better oral drugs; and La Jolla Pharmaceutical, working on autoimmune diseases. "Amylin is one that some people are betting their marbles on to develop the next potential blockbuster drug, but it has a storied past, and many investors are skeptical," says Leedom.

One money loser is an investor favorite: Neurocrine Biosciences. It is taking on insomnia and other neurological disorders. Despite its steady losses, Standard & Poor's lists it as a four-star stock (five stars is highest). Merrill Lynch's Ende says that "insomnia is an underpenetrated market," although he is only neutral on Neurocrine.

If there is a stock rally, some, all, or none of these San Diego biotechs could rise. But picking a winner is like getting a winning lottery ticket. Don't bet too much on any one stock -- and don't bet too much on biotechs in general -- unless you have lots of money to lose.

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