TGEN has executed well, but small biotechs are clearly out of favor now. In the gene therapy area, I've kept my small position in TGEN and ARIA (and even bought 1000 more ARIAW warrants at 1 1/16).
If you look at the year by year chart of biotech indexes, you see years when they do nothing, and then other years when they double...so far this is a do nothing year, as was last year. BUT, over a longer period the biotech indexes track the drug and S&P closely, but with a hell of a lot more volatility. That is basically because the business is not well understood by investors, is hard to predict, and has seasons of impossible hype. What this suggests to me is that the time to buy GOOD biotech companies when they are most depressed...and we are approaching that point.
Of course, It's much more fun to buy them when they are going up, but we may not see that happen til years end. OH, and did I forget to say that, because certain bio-ideas are fatally flawed or unworkable, some biotechs never will get on their feet...as the action in AIMM today illustrates. You have to live thru a biotech cycle or two (about 5 years) before this all becomes clear. |
