If success has many fathers and failure is an orphan, the still-young biotechnology community could start an orphanage.

From academic-sounding companies like Institute of Molecular Biology Inc. and OsteoArthritis Sciences Inc. to scientific-word-play-monikers like Occulon Corp. and Epigen, their deaths have been in spite of record investments and high investor expectations.

They are among the increasing number of biotech firms that have either failed, packed up and relocated, or have been swallowed by larger, more solid companies. And the numbers are expected to grow: over the last two years alone, there have been more than a dozen biotechnology company failures.

The failure came mostly because the companies ran out of money. Or the science that was promising in small animal testing proved lackluster or failed to work when tested in people.

``In the end it was a vicious circle. To get additional financing, there tended to be false expectations that were difficult to deliver, which, combined with some weak science, led to a disillusionment for key investors which caused everything to unravel,'' recalls Thomas R. Sharpe, former president of OsteoArthritis Science Inc.

Sharpe said the 35-worker Cambridge, Mass. company simply ran out of money and closed its doors this spring after going through $21 million in venture financing in five years.

Although relatively few biopharmaceutical companies shut down completely, more are expected to fail in coming years as venture capital and other forms of private investment begins to dry up, biotech investors say privately. They point to the ``living dead'' companies with second rate science and management that eke out an existence until the money runs out or obtain ``dumb'' money from wealthy individuals who are unsophisticated about biotech investing.

Like the fast-growing computer, communications and software industries - where hefty investments in promising technologies have led to boom and bust cycles - the nascent biotech industry is riding the same mammoth rollercoaster.

With an estimated 1,500 companies nationwide - 10 percent of which are in Massachusetts - there is the perennial question of where these companies will get enough money to fully develop products, obtain US Food and Drug Administration approval and finally become profitable.

In recent years the venture capital and private investment money that launched biotech companies was given support by major US and European pharmaceutical companies that stepped up to the plate with long-term financing partnerships, spending upwards of $3 billion a year in external research and development.

But with the 12-to-18-month boom cycle in high-technology and biotechnology investment over, there is mounting concern over whether the big pharmaceutical companies will continue their record-setting investment in biopharmaceuticals. Already, fewer venture capital companies are investing in new biotech companies, despite record levels of venture capital investment this year.

``If you follow the 80-20 rule of business, then 20 percent of the 1,500 biotech companies have really good science and 80 percent not much more than a basic idea,'' said Richard R. Selden, founder, president and chief scientific officer of Transkaryotic Therapies Inc. of Cambridge.

``Of the 20 percent with good science, only 20 percent of them have a business strategy to match their superb science. And that means 4 percent have both science and business. Now you need a third element - luck - and only half of them get lucky, so you are left with about 30 major biotech players, like Genzyme, Amgen, Genentech and Biogen.'' Selden, of course, hopes his 8-year-old gene therapy company is among that select group.

With approximately $100 million in venture capital investments, incluing $20 million from lead investor Warburg Pincus Ventures, the 80-employee company still has $50 million in the bank.

PriceWaterhouse LLP, which tracks venture capital investments for The Boston Globe, maintains that venture capitalists are continuing to fund existing companies, but are putting fewer dollars into new companies. In the first half of this year 42 companies received startup or early stage money compared to 47 companies in the first six months of 1995.

The decline is expected to continue in the second half, particularly for biotech companies seeking to develop new pharmaceuticals that are costly to develop.

Jean Francois Formela, general partner at Atlas Ventures Inc., a Boston venture firm, recalls the economic downturn for biotech after the boom of 1991 and 1992. ``Now the market is more selective and only the very strong companies will get funding. It will be a lot tougher for weaker companies than in the past.''

Indeed, Occulon Corp. of Cambridge, which went through $33 million in venture capital funds before closing its doors last year, realized its most promising product, a drug to treat patients with early stages of cataract formation, proved lackluster in initial human testing.

With the lofty goal of using drugs to delay or eliminate the need for cataract surgery, Occulon claimed its proposed drug had the potential to reduce medicare spending on cataract surgery by up to $2 billion a year. But in human testing, the drug failed to live up to the promise.

``We simply realized that what we had just did not work well,'' said Lawrence Kinet, Occulon's former president. ``It was not worth continuing.''

Similarly, Telor Ophthalmic Corp. of Woburn, Mass., which was also developing vision medicines, pulled the plug when its drug to treat glaucoma also failed.

Still other companies that ran into problems chose to make a fresh start outside Massachusetts. Creagen Inc. of Woburn had a very narrow technology in molecular drug discovery. Its chief source of funds, Medical Science Partners, a Wellesley, Mass. venture firm, found two other small firms that could complement Creagen to start anew in Montreal. The new company is called Cystar Inc.

The failures have had - and continue to have - drastic effects on the area's work force.

At the Insitute of Molecular Biology Inc., which was one of Worcester's bigger employers, 65 people lost their jobs on Thanksgiving eve when president Daniel M. Bell suddenly announced the company had run out of money.

For Sharpe of OsteoArthritis Science, closing the company this spring returned him to his home in Wilmington, Del. He had spent 26 months in Cambridge after 27 years at Dupont Merck, the joint pharmaceutical venture in his hometown.

Formed in 1991, the company focused on finding treatments for osteoarthritis, a diesease of the joints that affects older people. Using a substance found in marine sponges from the Pacific Ocean, the goal was to develop a drug that could stop progession and thus avoid surgery.

But within three to four months of arriving in Cambridge, ``I knew we were in trouble,'' Sharpe said, adding that key pieces of science were not as strong as originally envisioned. The company under previous management had embarked on too many projects, prompting him to refocus the company on a handful of areas.

Still, Wallace Steinberg believed in OsteoArthritis. He was a general partner at Healthcare Ventures, an Edison, N.J., venture firm that put up more than half the $21 million in investment funds. But when Steinberg suddenly died of a heat attack last summer, OsteoArthritis lost its chief advocate and money source.

In the last three months of 1995, Healthcare Ventures loaned OsteoArthritis money with the expectation the firm would find a corporate sponsor.

``We simply ran out of time,'' said Sharpe, who in January formally closed the company's doors.

Looking back, he says he is not bitter by the experience, but learned to focus on high quality science and not compromise to please investors. ``Management has to stand tall, be strong in their convictions and get people properly motivated.''

(The Boston Globe web site is at http://www.globe.com )