Wouldn't it be great to own a stock that gained 146% in one day -- like Biomira (NASDAQ:BIOM) did last Friday? Biotechnology stocks, with the lure of large future profits, have dazzled investors -- off and on -- with such promise for years.

Biotechnology, though, is high risk. Nothing demonstrated the bust cycle better than today's stock market action in Genta (NASDAQ:GNTA) and Corgentech (NASDAQ:CGTK).

Genta, up 74% at its peak on Monday, was looking good in February when fellow contributor David Nierengarten looked at the potential of Genasense to be the first antisense-based therapy to be approved to treat cancer. Subsequently, Fool contributor Charly Travers covered the failure of Genta and partner Aventis (NYSE:AVE) to get the drug approved by the FDA and the termination of their partnership. Charly went so far as to say that Genta is worth nada.

Today Genta is announcing that Genasense has shown favorable results in recent trials, in contrast to its late-November announcement of disappointing phase 3 trials. Some might even wonder why the stock, having traded at more than $15 a share numerous times over the last five years, didn't jump even more than it did (after hitting a 52-week low of $1.18 a share a week ago).

The answer is simple. The company has net cash (cash minus debt) of $7.4 million and had free cash flow of negative $61 million over the last 12 months. The cash is running out and, although the story may sound promising, it's been sounding promising for a while. Today's stock boom may seem like a rising phoenix, but it could be a mirage concealing a company with significant financing needs.

Corgentech, by contrast, is down around 60% so far today on the news that a phase 3 trial for Edifoligide -- to treat heart and leg vein graft failure -- failed to show benefits. The company and partner Bristol-Myers Squibb (NYSE:BMY) have another phase 3 trial under way using the same product for coronary artery bypass grafts, but results will not be known until early 2005.

The Corgentech bust is interesting because, unlike Genta, Corgentech has a net cash position of almost $130 million, or roughly $4.70 of cash per share. That's a lot of cash for an $8.00 stock. But $130 million is peanuts when it comes to taking a drug from development to commercialization. Investors, wisely, decided to watch future Edifoligide news from the sidelines because Corgentech's drug pipeline has nothing else past phase 1 trials. Like Genta, the company is betting its future on a drug whose future is in question.

The Motley Fool is investors talking to investors. Discuss Aventis and Bristol-Myers Squibb -- and thousands of other stocks -- on The Motley Fool discussion boards.

Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.