Positive signs are coming out of German biotech for the first time in years. Scientific output remains strong. The subsector boasts its first profitable pharmaceutical-oriented company; several on- or near-market products, and even a nascent IPO market. The fact that dozens of companies are expected to go bust this year is another sign of the industry's maturation. The long-awaited consolidation predicted in the wake of the Neuer Markt demise is seemingly finally happening. The have-nots are finally beginning to cluster around the haves.

European developers of therapeutic cancer vaccines are making steady, if slow progress towards clinical and regulatory success. But late-stage setbacks and delays at North American firms-which are several years more advanced and thus bearing the brunt of working out the regulatory kinks-highlight the challenges associated with bringing a cancer vaccine to market. Given the various technological and commercial approaches to immunotherapy on either side of the ocean, European firms are closely watching the progress of similar technologies in the US.

The UK's Acambis became one of a handful of European biotechs to post profits this year, boosted by a US government smallpox vaccine contract worth $428 million. The profitability label is a useful one these days: cautious investors find it easier to swallow R&D risk if accompanied by earnings. And Acambis' management has promised it can keep the company in the black, defying the skeptics. Near-term, it will leverage its smallpox franchise to secure further, and extended, government contracts. Beyond that, Acambis' pipeline of relatively low-risk products should start to come to fruition.