Monday, February 19, 2007

Kleiner's Bird Flu Bets Not Going Well

"This time last year, Kleiner Perkins Caufield & Byers gambled big. Amid all the headlines and hand-wringing over fears of a looming flu outbreak that could kill millions of people, the prominent venture capital firm formed a $200 million fund to invest in new pandemic drugs and vaccines.
As the KPCB Pandemic and Bio Defense Fund marks its first anniversary Friday, this much is clear: Investing in pandemic prevention is enormously risky, with the promise of mega-returns offset by the highly uncertain odds that a pandemic, despite the predictions, will sweep the world.

Kleiner Perkins won't disclose all of the companies that its fund has bankrolled, but at least two of them are publicly traded and offer a good look into just how stomach-churning pandemic investing can be."

What's giving investors the chills? Analysts say it's the queasiness over whether a pandemic outbreak will happen or, much like the widely-predicted Y2K computer meltdown, will prove to be much ado about nothing.

The likelihood of a pandemic flu "is anyone's guess," said Katherine Kim, analyst for C.E. Unterberg, Towbin. "It's not something you can predict."

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