Weakness in the pharmas is really a mixed blessing. From the momentum perspective it's probably good for biotech - hot money flowing out of drugs into bios. However from a valuation perspective it's bearish, as the pharmas have ultimately to be the metric against which biotechs must be measured. For any biotech that aims to be a small or medium (or even in the case of MLNM large <g>) pharma, cheap pharmas cannot be good news.
Striking right to the core, thanks. Valuations need to be brought into line with market realities. Again, there are only so many diseases, and margins (generalized) are already optimal. Most of our stocks have done a 10X in valuation. Many were waiting for this, based on "justice". For those "platform" companies that have done 20-40X, the pipeline is still often devoid of late-stage product candidates.
Those companies must do something fast in the realm of M&A. So...... while I agree with your rationale, 100%, it will be "cured" when HGSI buys Merck.
Rediculous? Yes. However, put those strong currencies to work..... let this liquidity window stay open for a bit..... and MLNM could focus on both the acquisition of more pipe *and* on the purchase of current income.
HGSI is a wreck, waiting to happen. Haseltine can prevent it from happening, but he's going to need to reach deep into "Levin territory" for the necessary innovation. I'd take out private companies with real product candidates, retaining current management with, given success, a promise to spin them out. There are other routes. Marvelous job to date, but bringing this sucker home to roost is really going to be a challenge. Can't wait to see how it's going to be approached! |
