The golden age of biotech is before us. Recent advances in genetics fuel products that will create more value in the 21st century than the Internet. Learning about biotechnology will not only benefit us as investors, it will help us understand a revolution affecting our daily lives.

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By David Gardner and the Rule Breaker Portfolio Team

"Wherever there is revolution, there will my investing dollars be."
-- David Gardner, co-founder of The Motley Fool

As we begin the 21st century, literally hundreds of new biotech projects begun in the last decade are poised to power into the marketplace. This explosion will fuel opportunities for investors and employees alike, and we will all benefit from the products. As Craig Taylor of Alloy Ventures says so succinctly, "Soon everyone will be communicating all the time, anywhere, with beautiful color monitors, but parts of their bodies will need fixing."

The biotech century
If you're here, chances are you don't need convincing about biotechnology's place in our world. You are soaking up all you can on the subject. You have an insatiable intellectual curiosity anyway. You probably love to read and have a copy of Genome: The Autobiography of a Species in 23 Chapters, by Matt Ridley in one hand and other hand on your mouse clicking through our Biotechnology discussion board. You are looking to gain all this knowledge to benefit you as an investor and as a member of society.

Because you better believe we're all going to be increasingly involved with biotechnology -- in our headlines, our lives, and the questions we ask and answers we give for many years to come.

Mark my words: biotechnology will create more value in the 21st century than the Internet will, and I say that as a big Internet fan. The same buzz that we hear about "Internet stocks" has already transferred itself over to "biotechnology stocks" (as it did briefly in the early '90s when the world first realized this was a viable technology, despite a lack of profits or evident results at the time).

We love biotechnology. We are amazed by our species' increasing ability to understand, and in some critical and exciting ways, reengineer the world in which we live. It puts us in mind again of one of our 10 favorite quotes from the Bard, holding as it does so much optimism -- and so much applicability in our own age, a Renaissance of a new sort, but every bit as exciting as what happened in Europe 400 years ago:

What a piece of work is a man! how noble in reason!
how infinite in faculty! in form and moving how
express and admirable! in action how like an angel!
in apprehension how like a god! the beauty of the
world! the paragon of animals!

This classic humanistic expression reminds us not only that we are a piece of work, but that as pieces of work we can actually be reworked. Ask the sufferers of cystic fibrosis who should, not before too long, have a treatment that replaces the single faulty gene responsible for the condition with a healthy gene. Bang-o. That's just one small example of what can be accomplished through genetic engineering.

What is biotech, anyway?
Good question. Here's what it means to us: Biotechnology is the application of biology for human ends. This is a broad-brush, encompassing definition obtained from the excellent primer Improving Nature?: The Science and Ethics of Genetic Engineering by Michael Reiss and Roger Straughan. It speaks of the use of our understanding of genetics to rework the world in diverse ways that are deemed more satisfying to us, as stewards.

The various examples of biotechnology run the gamut. From the crossbreeding of plant and animal species by farmers to obtain living beings that otherwise would not have existed (blue roses and bulldogs, for example) to the stimulation of white-blood-cell growth in chemotherapy patients (Neupogen, Amgen's billion-dollar bioengineered protein).

Looked at in this simple, rational conception, biotechnology is not something cooked up in a test-tube by a mad scientist eager to create a man-eating frog the size of an elephant. (OK, we should watch our backs, because something like this may eventually be possible, of course.) No, biotechnology is just a very powerful technology that -- like any other -- must be used responsibly and constructively to beneficial ends.

Repeat: Biotechnology is not an industry. It is a technology. There is no "biotechnology industry," per se -- just as there is no "Internet industry." There are many, many companies that use biotechnology or the Internet in order to profit, providing products or services that customers find attractive and valuable. But just try to identify a single "top dog" Internet or biotechnology company. It's not really possible. Again, these are technologies that different companies adopt in order to gain a lead in one industry or another.

Fascinating, passionate discussion and debate surround these ideas, phrases, and words. We at the Fool in our daily stories (available on the Biotech sector page) look forward to discussing many thoughts and considerations of the issues at stake here. With the Internet and the emerging technology of wireless, biotech makes up one of the three most interesting, world-shaping, outrageous technologies of our time.

Period.

We live in the beginning of the genomics era
We live at the end of the B.U.G. era, which is one way to view the calendar of human history. B.U.G. years are the years "Before Understanding Genetics" -- human genetics, that is -- which has been one consistent historical era since our planet was formed 4.5 billion years ago. The entire history of Planet Earth has been purely "buggy."

But two key developments have propelled us to the climax of the B.U.G. era. The first is Gregor Mendel's discovery of genetics, which began in the 1850s in Moravia as he crossed varieties of the garden pea in his small monastery garden. The eventual results of this first key development are evident today. After many further advances and efforts, we are now able to manufacture human proteins and clone animals.

The second development is the huge gains in computing power achieved over the past 30 years. It is symbolized perhaps by the laptops upon which this article was created. A little Pentium laptop holds many times the computing power of machines that just one generation ago looked like huge vacuum cleaners and occupied whole rooms. (And you ain't seen nothin' yet -- referring to advances in computing power, that is, not this article!)

Either of these developments on its own provides outstanding rewards in efficiency, productivity, understanding -- and the profits netted by those who dreamed them up. But put both of them together -- genetic studies with computing power -- and you arrive at the inevitable result: a total understanding of the genetic map.

And the same four nitrogenous bases that run through human DNA -- adenine (A), cytosine (C), guanine (G), and thymine (T) -- run through plants, animals, and all living things. We are working toward a total genetic map -- a total understanding of where every gene sits in every creature, and what each one means.

We are still a long way away from a total genetic map of everything. But there are major developments in the genetic map of one particular species that has always held our imagination and interest: our own. In June 2000, both Celera Genomics (Nasdaq: CRA) and the government-funded Human Genome Project announced that they had mapped human DNA, the human "genome." ("Genome" simply means the total genetic material of a species.) And this is just the start, with other animals and plants to follow.

This genetic information is on track to be the cornerstone for most future drug research and development. The opportunity to identify and replace one or more genes to cure a disease (not just for the afflicted but for all their future offspring) should in most cases be far more effective than the existing paradigm: hoping to discover a cure or balm from chemicals or organic substances drawn from nature.

The implications are staggering.

Think about it in the terms used by Tom Headrick, from our Fool community. Tom asks: "How much does it cost to bring a drug to market using today's current methods? How much of that cost will be eroded by having this genetic/biological material available in the database as a springboard launching a new drug or therapy for drug companies?" He closes by pointing out, "That's why they are [working with Celera]," and we would add any number of other companies in this area: Incyte Genomics (Nasdaq: INCY), Human Genome Sciences (Nasdaq: HGSI), and Gene Logic (Nasdaq: GLGC).

Other companies have undertaken genomic research and isolated gene sequences from the human genome. These companies, including Millennium Pharmaceuticals (Nasdaq: MLNM), Myriad Genetics (Nasdaq: MYGN), Genset (Nasdaq: GENXY), and others, are commercializing their findings, meaning they're selling them to biopharmaceutical and healthcare concerns -- all the big drug company names you already know.

Where to?
Start with the Biotechnology sector page, where we've pulled together useful stuff from the Fool and elsewhere. Head over to the discussion board for biotechnology, and for any of the stocks whose names are mentioned, including Celera, Human Genome Sciences, and Millennium Pharmaceuticals. You can bet that for everything I say, there is someone in our Foolish community who knows more -- much more -- and who is willing to share it to learn together. They will lead you to more resources.

If you're brand spanking new to biotech, I recommend Biotech Investing Do's and Don'ts.

And hold on to your genes, because it's the beginning of the revolution, baby!

Fool on!