Malcolm,
I have a bit of a different view.
<<<IMHO, work on genes, DNA,etc. is a poor area in which to look for a gorilla. Most of the research is financed by NIH and other government agencies, so the results have to be published and available to everybody.>>>
Consider that the ARPANET was funded by a governmental agency (DOD). That work has certainly not languished in obscure engineering journals......
But more to the point: It is true that a major portion of the research in genetics, genomics, and biomedicine in general is government funded. But that has never been any impediment to the development of hugely successful commercial ventures which found innovative ways to capitalize on such publicly available knowledge. Just for one example, virtually all the R&D on tPA (and it's predecessors, urokinase and streptokinase) took place in the published scientific literature. But that did not prevent Genentech from making---and continuing to make--- $ billions on these developments and discoveries. The same may be said for the majority of biotech products from hugely successful companies such as Amgen, Biogen, and Immunex, as well as the vast majority of biotech companies in general, many of whose origins can be traced to academicians who took their R&D---published and freely available to anyone----into commercial ventures with VC funding. In scientific journals when articles are published, the authors' affiliations, both commercial and academic, are typically published with the article, as is the source of the funding. Cursory perusal of the major scientific journals will reveal that many published, freely available reports emanate from commercial ventures, including AMGN and MLNM and in fact the vast majority of biotechs.
In regards to genomics and the Human Genome project, the above is certainly not lost on Celera, busily on the trail of the complete human genome, with plenty of VC forthcoming. There would probably be others, were it not for the relatively high barriers to entry into this market.
<<<Proprietary technology will be scarce. Technologically, it's a long long way from knowing the chemical link up of a chromosome to finding a therapy for anything. Part of what one hears is pure hype>>>
Yes, hype abounds, and yes, it is a long way. For biotechs, from initial discoveries until FDA approval and the generation of revenues may take 10 years. But breakthroughs in scientific and medical knowledge have always spawned no shortage of people who, seeing the potential in such knowledge, have capitalized on it in highly successful commercial ventures. Those who have been patient and determined enough to bring products to market have been richly rewarded, and there are more biotechs existent now than at any time previously, funded with VC, not government funding in most cases. So, there seems no shortage of people who are willing to devote a major portion of their lives and fortunes to developing ideas which may be a long way from market into commercial ventures. I would suggest that a major reason for this is that, while the chances of failure are high, the rewards for success are extremely lucrative.
<<<But the telescopic view is too far away for an investor.>>>
Perhaps. But, OTOH, I have nearly tripled my initial investments in HGSI and MLNM and nearly doubled in AMGN, all in less than a year. Furthermore, I'm convinced that this is just the beginning, particularly in the case of MLNM, and perhaps to a lesser extent for HGSI. These companies are very early in their growth cycles, and busily at work on an enormous foundation for the future. AMGN, meanwhile, will continue to mature into a dominant, "gorilla" of biotech, given that their pipeline extending many years into the future is arguably the strongest there is, that they attract world-class scientists, and plow huge---and increasing----amounts of cash back into their pipeline, and still reward investors with high net margins and increasing stock prices.
In my view there are two major revolutions just beginning which will transform society as we know it, and make vast fortunes for those with enough foresight to see the investment opportunities: the building and development of the telecommunications infrastructure, and the application of genomics (and molecular biology in general) to therapeutics.
Disclosure: As you guessed, I continue to be long MLNM, AMGN, and HGSI, am hoping to add to my holdings soon, and have difficulty foreseeing a circumstance when I might sell, baring some calamitous event.
As always, JMVHO.......
Cheers,
Walkingshadow |
