Last week's cloning announcement predictably prompted a rash of phone calls to Lisa Tuckerman, a money manager whose job is to spot investments in the biotech field. Were these investors looking to make a buck in the new world of cloning? Not exactly. They were reporters wanting interviews. Tuckerman, in fact, said she didn't get a single Wall Street call wondering about Dolly's moneymaking opportunities.

Wall Street is notoriously short-term oriented, so it's appropriate that investors ho-hummed the cloning news. After all, it will likely be five to 10 years, a lifetime for Wall Street, before any practical, or profitable, applications spring out of the development. To be sure, the stock of tiny PPL Therapeutics rose 65 percent, but most other biotech stocks barely budged.

Yet the Scottish advance adds tantalizing promise to the race to engineer animals that could produce drugs for an array of human health problems. Scientists envision cows that produce altered milk formula for premature infants, and animal organs genetically similar to human organs. All this is at least theoretically possible, and was even before last week's announcement. But the real business question is whether cloning will be a better way to build drugs--or an unreliable sci-fi adventure.

Cloning is the latest enhancement of a biotech field called transgenics. For at least a decade, a handful of transgenics companies have been altering the embryos of goats, pigs and mice with human genes so they can produce proteins and drugs for treating cancer and other diseases. No transgenic products are for sale, but human testing is starting. The furthest along, Genzyme Transgenics Corp., has grown goats whose milk contains a human anticlotting protein that can be used in heart-surgery patients. PPL has already bred cows, including one named Rosie, which may produce milk containing a protein beneficial for infants who can't nurse. Other companies, like Alexion Pharmaceutical, are working on ways to get pigs to grow hearts and kidneys that won't be rejected in transplants.

Cloning promises to someday do all that--but quicker and more efficiently. Transgenics companies now must breed their genetically altered animals through several generations to get the right mix, a costly hit-or-miss process that could take several years. PPL spent $4 million developing Rosie and two herds of cows in West Virginia, versus $750,000 for Dolly. And traditional biotech firms produce proteins by altering human cells in large vats of yeast, an expensive technique too.

But with cloning, companies could engineer the desired animal with the new drug-producing genes and replicate it hundreds of times over--a paradigm Henry Ford would recognize. And not only would there be more animals, says PPL, but each would be more efficient. Alan Colman, PPL research director, says that when using normal transgenic breeding only 1 or 2 of every 10 sheep produces a high level of the desired protein. But with cloning, he predicts, "they'd all be high-producing animals, and we'd have a production herd in the first generation."

PPL is already talking about a $1 billion market for itself early in the next decade. It hopes to clone genetically engineered animals that will produce a tissue glue for use in surgery and a drug for cystic fibrosis.

Is all this just double talk? The potential needs clearly exist, but the scientific and commercial hurdles are steep. PPL first has to clone an animal with human genes, and Colman told NEWSWEEK it hopes to do that with a sheep by the end of this year. But its success rate at cloning Dolly was only about .3 percent, a level it would have to improve considerably to make its technology cheaper than competing biotech methods. "In the end, it's simply a manufacturing question: can they make [drugs] cheaply and safely?" says Tuckerman.

There's another question when it comes to cloned herds, of course: does anybody want to eat a cloned chop? The real answer is that it may depend on how one tastes. But the marketing problems could be nightmarish, and last week giant food companies said they weren't interested. Don't take it personally, Dolly.