BUSINESS COMMENT: By Kenny Kemp

THE nearest most of us ever get to a laboratory is via a gory episode of CSI Miami. Yet for those strange souls who excel in the world of mass spectrometry, biomarkers and DNA testing, there is the opportunity to take part in a lottery. It involves spinning out a business from a chosen field of science with an eye on the commercial jackpot. If ever there was an industry which invokes the caveat emptor principle, it is life sciences. But the only real certainty for the investor who buys a ticket is that failures far outnumber successes.

The news that one of our listed drug development businesses, Ardana, is running out of cash is sad news, but it is hardly surprising. If the company's employees had been squandering money on a lavish lifestyle, then criticism would be in order, as prudent biotechnology companies have to manage their money like no other.

Research is expensive and gaining regulatory approvals a tortuous process. It is often a race against time and in Ardana's case much of its research might well be snapped up at bargain basement prices. The only way of making money is by getting your products to market or selling your intellectual property to a bigger fish. From the outside looking in, Ardana was a white hope that simply ran out of steam.

The downbeat finale to the Ardana story should not obscure the fact that the life sciences and biotechnology industry in Scotland is one of our undisputed strengths. We have produced a lot of small-scale winners but few who have hit all the numbers plus the bonus ball. Jim Mather, the enterprise minister, sees life sciences as one of the nation's economic "clusters" along with financial services, food and drink, oil and gas. He's absolutely right, but he should also be presenting a more forcible case for Irish-style tax breaks.

We also need a reality check. Brian Horsburgh, a leading academic and director of the IP Group, told a recent Grant Thornton biotech forum that Scotland doesn't have the depth and calibre of worldclass scientists, but does have a few pinnacles of excellence in scientific research.

Everyone agrees we need more pinnacles. But good science takes time and money to become a successful business. And good science doesn't always make a successful company: there are other factors involved such as business plans, funding, marketing and capable management.

Considering our size as a nation, Scotland has built a remarkable global reputation in life sciences, although despite having consistently punched well above our weight, we don't have an indigenous Amgen, AstraZeneca, or Novartis.

Dr Barbara Blaney, the director of the BioIndustry Association in Scotland, says Scotland mustn't rest on it laurels and must find ways of funding academic and clinical research so that Scotland has the best chance of bringing commercially viable products to the global market. Venture capitalists, angel investors and Scottish Enterprise continue to play a critical role in funding the gaps for Scotland's science.

Meantime, the credit crunch has focused the minds of the life science industry on future funding. A sense of realism prevails. Blaney is encouraged by Scotland's angel investor community which is keeping alive a lot of exciting young companies. Scotland's angels, such as Braveheart Investors, have consistently been prepared to provide second and third rounds of funding. This is a great boon for Scotland.

According to Nelson Gray, the Scot who has just been named as European Angel Investor of the Year, there is also an interesting shift which might bring fresh benefits to Scottish companies prepared to share their developments with a bigger player.

He says there is a clear sign of change in what it takes to have a successful investment, although he stresses that a successful company is another matter. Only one in eight of Gray's investments return significant profits - that's venture capitalism. Now Big Pharma, those pharmaceutical giants based in America, UK and Europe, are scouring the globe for new technologies and compounds with "promise" at a much earlier stage. Before, a new company needed a stash of cash to take research to clinical trials. Now, Big Pharma are buying in earlier.

This is riskier for those big industry players but it means they pay a lot less and cut out the competition. The idea is that virtual companies will concentrate on developing intellectual property and data which the big companies actually want. It is almost a shopping list of what the big drug companies require - and they are encouraging new companies to fill that basket with goodies.

That sounds excellent news on the face of it - but Scotland's problem has been that we haven't had too many companies listed on the stock market. We'd love to have more but then we can't have it both ways, and perhaps we should be welcoming the opportunities to create more spin-outs.

But Blaney is right, too: we mustn't allow our best science and technology to simply evaporate out of the labs straight into the shopping baskets of Big Pharma. On a national level, if there is greater success, the country deserves payback for its support and investment in universities and science.

While we have to share our best science, Scotland shouldn't allow its precious intellectual assets to be frittered away.