BOSTON ( TheStreet) -- The accumulated deficits of Telik ( TELK), Xoma ( XOMA), Genta ( GNTA), Cell Therapeutics ( CTIC), Discovery Labs ( DSCO) and Cel-Sci ( CVM) total $4.6 billion.

Think of the good all that money could have accomplished had it been invested in real medical research.

Investment capital is a precious resource, so it shouldn't be wasted on drug and biotech companies that have proven their incompetence over years, even decades. Somewhere between 300 and 400 publicly traded biotech companies operate in the U.S. today. That's way too many. I'd venture to say we could cut that roster in half, at least, and not suffer any negative effects. In fact, the money saved by not investing in the laggards could be pumped into a smaller number of biotech firms worthy of support. That would help the sector, not hurt it.

The biotech sector needs a chopping-block equivalent of the Judge's Table from the reality TV show Top Chef. At least once a year, a group of companies representing the biotech sector's perennial loser losers would face elimination by a panel of objective and steely eyed judges. After listening to these bio-bums confess their crimes against good medical research, the judges would force one or more of them to shut down permanently. Any cash and assets remaining would be sold off and returned to shareholders.

I nominate myself chief justice.

"Xoma, pack your test tubes and go."

"Cell Therapeutics, Genta, put down the beakers and scram."

Lest anyone get the wrong idea, I'm not criticizing failure. Drug development is risky, so some (even most) drugs that seem promising early will blow up late. Smart, successful drug development is often borne from failure. Genentech wouldn't have developed Avastin or Herceptin without setbacks and clinical trial failures; the same goes for Human Genome Sciences ( HGSI) and Benlysta.

A phase III study that goes kaboom doesn't automatically warrant a spot at the biotech Judge's Table. What does is an unbroken string of clinical trial failures, multiple FDA rejections, broken promises, unchecked shareholder dilution, general bamboozlement and a management philosophy that views a corporate balance sheet as an executive ATM machine.

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