Thursday, July 24, 2008

Political Risk Watch: Nanotechnology

In print and online, Forbes has chronicled the amazing potential of nanotechnology, or the ability to see, manipulate and manufacture things that are as small as one-billionth of a meter.

At a Wednesday event in Washington, D.C., a panel of experts didn't play down that potential.

"The future of nanotechnology is extraordinary," said J. Clarence Davies, a former Environmental Protection Agency (EPA) official who now serves as a senior adviser to the Project on Emerging Nanotechnologies at the Woodrow Wilson Center in Washington. "When you start crossing it with synthetic biology and artificial intelligence and so on, science fiction looks very pale in comparison."

Lately, however, the market has not shared in the enthusiasm, at least when it comes to pure-play nanotechnology stocks. In the table below, we show four that have dropped more than 45% from their respective 52-week highs.

Uncertainty stalks these companies. Altair Nanotechnologies (nasdaq: ALTI - news - people ), Nanophase Technologies (nasdaq: NANX - news - people ) and Nanosphere (nasdaq: NSPH - news - people ) have never turned a profit, and security analysts project that all will lose money for their current and upcoming fiscal years.

Another source of uncertainty, although not necessarily a negative, is regulation. Thicker red tape surrounding nanotech is practically inevitable, say Davies and colleagues, who have released a 28-page regulatory agenda for the next administration.

Full story at