THIS WAS supposed to be Icos Corp.'s breakout year.

Seventeen years after the biotechnology company launched, it had a blockbuster erectile dysfunction drug poised to rack up more than $1 billion in sales during 2007. The company, which counted Bill Gates as an early investor, was becoming consistently profitable, a rare feat in its industry. From its Bothell headquarters, Icos had grown into the largest biotech firm still headquartered in Washington. Other firms that rivaled Icos in the number of local employees, such as Immunex, Physio-Control and Spacelabs, were owned by companies from outside the state or the country.

But now, Icos' blockbuster drug, Cialis, belongs solely to Eli Lilly & Co., which bought Icos Jan. 25 for $2.3 billion. All of Icos' 700- plus employees have already lost, or are expected to lose, their jobs.

It's not the first time Seattle's biotechcommunity anchor was engulfed by an outof- towner. Five years ago, Amgen swallowed Immunex in similar fashion, though it has kept more than 1,000 jobs here. A host of smaller firms, including Corixa, also have succumbed. "We're not seeing companies in Seattle go bust. They're getting bought," says Bruce L.A. Carter, chairman and chief executive of Seattle's ZymoGenetics Inc., which is now the largest independent biotech firm in the state.

Some of those who root for the region's biotech industry wonder whether such buyouts hold Seattle back as a top-tier center for the life sciences. The Puget Sound region's cluster of biotech companies ranked among the top five in 2002, according to a study by the Brookings Institution. But more recent reports rank the region further down, in the top 10 or 15 biotech centers nationwide.

Biotechnology doesn't seem a natural candidate to count on for booming growth. The process of developing a new successful drug by researching countless molecules is akin to panning for gold. Most experts quote the fig- ure that only about one compound out of 1,000 makes it to the human testing phase. And only about one in 10 drug candidates that undergo clinical trials actually gets regulatory approval and reaches the market. All the while, the process takes hundreds of millions of dollars. As a result, even the most promising start-ups fall on their faces. Other companies may have drugs that perform well in early tests, but they can't raise money year after year while waiting for regulatory approval.

Even among the successful, profit-making biotech firms, such as Icos and Immunex, few just keep growing until they're another Amgen or Genentech, says David Miller, president of Seattle-based Biotech Stock Research. Most that don't burn out end up being bought. Which means many factors can't be controlled by people who want to boost the state's biotech industry. Recruiting new companies to the area helps, but it's no guarantee that hundreds or thousands of stable jobs will be created.

However, the alternative is to drop out of the race for the well-paying jobs that the industry creates. Nearly all states and an increasing number of foreign countries are at least talking about ways to grab a piece of the biotech pie. "There are more places chasing after what, thanks to consolidation, is a smaller industry in some respects than it was a few years ago," says Joseph Cortright, an economist with Oregon-based Impresa Inc., who co-authored the Brookings study of biotech centers.

The reason for the biotech race between regions is purely economic. Wages for such jobs average $65,000 to nearly $80,000, according to a variety of surveys. And, as a cutting- edge industry, biotech is viewed by many economic development officials as a good bet for the future. The work done in laboratories chasing after new treatments is easy on the environment and attracts desirable, educated workers.