It is easy — perhaps too easy — to be cynical about the recent difficulties at British Biotech (see page 299). Those who have seen their shares in the flagship company fall to a quarter of their 1996 values in recent months — largely as a result of delays in obtaining regulatory approval for the anti-pancreatitis drug zacutex — will take little comfort from being told that they are merely learning the hard way of the volatility of biotechnology stocks. It is a lesson already familiar to US investors, who saw many similar stories in the early 1990s.

Nor is there much consolation in the departure of the company's founder and chief executive, Keith McCullagh. The move will assuage those investors who feel that McCullagh has been somewhat economical with the truth about the prospects for zacutex; it will certainly bring satisfaction to the company's former director of clinical research, Andrew Millar, who was sacked last month for giving his own, unauthorized, assessments to shareholders, which differed sharply from those of his boss. But it has done little for the credibility of Britain's biotechnology industry, on which its future investment prospects depend.

On the positive side, the whole affair shows that at least part of the regulatory system is working well. The European Medicines Evaluation Agency seems to have been properly cautious in judging the company's clinical data to be an insufficient basis for recommending regulatory approval of zacutex. It remains to be seen how the London Stock Exchange and the US Securities and Exchange Commission handle allegations that directors sold shares before investors had been provided with bad news about the prospects for the anti-cancer drug batimastat, whose clinical trials were suspended in 1995.

If there is a silver lining, it is the way the affair has emphasized the need for greater scientific literacy in the investment community (just as, three week ago, media frenzy over the potential anticancer drugs angiostatin and endostatin carried a similar message for patients). With few proven products to its name, the biotech industry — like the travelling doctors of the nineteenth century — can only trade on hope. It is perhaps inevitable that the boundary between hope and hype frequently becomes blurred. Millar is to be thanked for highlighting how easily it can break down, and policing the boundary remains an important task. But in the end, caveat investor must remain the soundest advice.