To a big extent, drug development is a crapshoot. Despite all of the research that goes into the products before they even begin clinical trials, no one really knows what's going to happen once a drug company starts using the drug in humans. This unpredictability makes investing in small biotechs very risky. If the company is resting its hopes on a single experimental drug and it bombs, then the stock gets knocked out, too.

This is why broad portfolios of experimental drugs are superior to thin pipelines. A company with a deep drug pipeline is not sunk if one of its drugs fails. To take an optimist's view, a deep pipeline also gives the company a chance to score multiple successes.

Biotech investors should consider taking a look at Motley Fool Rule Breakers recommendation Protein Design Labs (NASDAQ:PDLI), which has quite the pipeline for a company of its size. The jewel in the company's crown remains Nuvion, which is in development for the treatment of severe ulcerative colitis -- a disease that leaves patients with no treatment options except for surgical removal of their colons. A good drug is certainly a better alternative, and that's why I have Nuvion pegged as a potential blockbuster.

Management initially wanted Nuvion on the market by the end of 2007, but that time frame doesn't seem likely now. PDL has to run two phase 3 trials to get approval from the Food and Drug Administration. Although the first trial starts late this year, the second won't get moving until there's enough data out of the first trial to show that the drug is safe, and that makes it very hard to estimate exactly when Nuvion could launch. Some clarity will come at the end of this month when management is set to discuss the development timeline.

After Nuvion, the PDL drug to watch is its anti-angiogenesis drug M200, which is similar to Genentech's (NYSE:DNA) Avastin, a monoclonal antibody that has proved that blocking the formation of blood vessels to tumors is a successful approach to treating cancer. Avastin sales broke $200 million in Q1, and it's just getting started. This will be a multi-billion-dollar drug, and PDL receives a royalty payment on it.

M200 also stops the formation of blood vessels to tumors, but by a different mechanism from what Avastin uses. It is too early to know whether M200 even works in treating patients. But we might know within the next year whether it will be a blockbuster or a bust, when data from some of the current phase 2 trials will be reported at the 2006 American Society of Clinical Oncology meeting. Along with Nuvion, this is the drug to track over the next 18 months.

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Fool contributor Charly Travers is the Rule Breakers biotech analyst. He owns shares of Protein Design Labs. The Motley Fool has a disclosure policy.