Biotechs and drug makers provide economic remedy.

• Position: Pharmaceuticals

Forgive drug companies if they're gloating a little. During the tech boom of the late '90s, they were overshadowed by software makers and dot-coins, some of which sold for fortunes before they had a product.

These days, some tech companies trade for pennies a share, while a quartet of Carolina-bred drug makers -- Inspire Pharmaceuticals, Trimeris and Triangle Pharmaceuticals, all in Durham, and Pozen in Chapel Hill -- are within a year of bringing their first products to market. Investors have grown fond of Trimeris, which traded above $40 in December. The others traded between $5 and $8.

More important, homegrown companies with drugs on the market will show that the state is becoming a hotbed, says Christy Shaffer, Inspire's CEO. Inspire has a treatment for dry-eye disease and expects peak sales of $700 million to $800 million a year.

Trimeris' drug could be even bigger. A new form of AIDS treatment called a fusion inhibitor, it keeps FIJV from entering healthy cells, rather than attacking the virus once it's inside, as current drugs do. Analysts estimate sales could reach $1 billion a year. Pozen's drug will treat migraines and will compete with GlaxoSmithKline's Imitrex, which has sales of $1 billion a year.

Whether the state can hold on to its promising young drug companies remains to be seen. Triangle Pharmaceuticals, which also is developing an AIDS drug, has agreed to be acquired by California-based Gilead Sciences in a $464 million deal that should close in early 2003. Pilot Therapeutics wasn't wooed by another company but by another state. Pilot -- a fast-growing company about to roll out an over-the-counter asthma remedy -- moved from Winston-Salem to Charleston, S.C., for an incentive package estimated at more than $10 million.

The state's largest contract-research company, Durham-based Quintiles Transnational made some moves, too, but not geographic ones. Besides conducting clinical trials and renting out its sales representatives, the company has begun investing in drug companies, including its customers, and it's taking royalties instead of fees. Because of charges related to the strategy shift, Quintiles lost $1.03 a share in the third quarter of 2002, compared with net income of 4 cents a share a year earlier. Chairman Dennis Gillings offered to buy the company for $11.25 a share, a 35% premium, but the board nixed it in November. It hired an investment banker to explore its options, including selling to an outsider.

The...