|
Richard, Chiron was the first biotech stock I ever shorted back in
the days when everything had to have a bio or a gene in its market
mix (before the great technology bubble).
First, they are absolutely first rate on the science and I think
they may have the best pipeline in the business. They are also honest
and clean and not especially touty. I like that. But, unlike Biogen,
Amgen, Genzyme, and Genentech, they don't seem to know how to bring it
down to the bottom line. For example, betaseron is a great product and
it had a window of nearly 18 months when it was the only product in
the market for MS. Chiron just couldn't deliver the product in enough
quantity to make the money they should have. Now, they are getting
there, but Biogen has a competitive product, so they no longer have
a clean field. Also, the Medical Technology Newsletter has been super
touty, and unreasonably so, on Chiron right from day one. So, a lot
of people bought it with expectations the company couldn't deliver.
OK, but all of that is in the market. My gut tells me that this co.
needs big drug company collaborators. One reason they haven't delivered
the goods is that they try to do everything themselves. So, while
Biogen had Schering market Intron A, and Amgen had a deal with J&J on
Epogen, Chiron has tried to play both research house and drug wholesaler
all at the same time. They didn't want to give up any of the profits.
That is admirable, but obviously has yet to work out. So, if they
get some managers who can manage and put the lab guys back in the lab,
they will be a great winner. But, if the guys who are running the
show continue to refuse to read the writing on the wall, it could be
tough sledding. I would bet on them at current prices, but I would
bet the ranch if they got some business management. MB |
