Sorry to take so long getting back to you, but that is an intimidating list to respond to.
V1 and I are considering ISIS, as we think they are the antisense leader, but I'm not certain how close to market they are and haven't looked them up in Edgar yet. We'll let you know if we decide to invest. In the meantime, maybe you could do some research and post your analysis here.
I saw Arqule mentioned in an article about undervalued biotechs, but know virtually nothing about them.
I think Chiron is one of the hottest and more undervalued of the biotech bluechips and am considering taking a small position myself, and we were discussing possibly adding them to the portfolio.
Neurex I have a position in and like their potential, but do not necessarily think they are the best value available right now, one reason they are not in the Model even though I hold shares. I also originally bought them with a short term mindset and they came to within an eighth of a sell limit order where I would have taken profit, then they took a major dump from the 17s to the 10s. They are a returning walking dead it seems though.
Ligand is a V1 and Andy favorite, and I haven't studied them at all, however it seems that they have a huge full pipeline, but nothing approved yet - Henry Niman is the real expert on this one is my understanding.
We like Genzyme Transgenics alot and I plan to buy 1-2000 on Monday as today brought me room on my margin. V1 feels that the CRO business at GZTC is worth its entire market cap and you essentially get the transgenic business for free. I'm a big believer in the future of the transgenic business, as producing high value proteins in milk is really cheap and efficient, and the advances in the field are very stunning. Now, with the latest improvements in cloning, it should even be more viable.
Now, based on your comments on your current portfolio, it seems to me that you are too concentrated in GENZL. I too like GENZL and hold some, but it seems to me that you really want more diversity in biotechs. Of course this is coming from someone who is 2/3rds in INCY, but having worked there and having a $2.12 basis on a $50 stock I'm fine with it. I'm also a margin monger and am highly leveraged, but I also hold a big chunk of private Norian founders stock that I feel gives me some long term balance even if I blow everything else.
My next largest personal positions are in MATX, CMTR, BSX, CYTO and GSII, in that order.
BSX was a dead cat bounce short term play and is coming up nicely, but when it peaks and flattens, I will probably profit take.
I am really high on CYTO right now as they have approved products, and sell at what they did before the approvals. They just don't get any respect from the analysts, YET! They are presenting at Alex Brown next week, and a European conference in June, see today's press release by the CEO on it. While their are a lot of shares outstanding, I feel that it has a good upside and a minimal downside. Both I and the Model doubled up our postions this week.
I feel the same way about CMTR, which has a very small market cap and is in product launch on a couple of products. While they are not unique products, the burn is low and it won't take much revenue to make them profitable - another recovering walking dead. I've posted on them extensively on their thread in the past.
MATX I like because they have launched their product in the UK, the rest of europe should be a regulatory slam dunk and they could get US FDA approval any time now. Plus the products are based on existing chemotherapy drugs, in a unique viscous formulation that keeps them put where you inject them in the wart or tumor. I see them as a when they get approved as opposed as to an if they get approved. One note of caution on MATX, they are currently defending themselves in a jury trial brought on by Collagen Corp who is suing them for intellectual property theft. I don't think a loss will hurt them materially much, but the share price could suffer. While they are covered by analysts, they pissed off the fund money managers last year and fell out of favor resulting in a 75% loss of market cap. They trade at about 1.2X book/cash value, and have over $100M cash. I see all of these as being viable big gainers in the next 6-12 months.
I myself tend to shy away from stocks that are going for the blockbuster, but are years from getting it. Too many fail clinicals for me to want to own them.
Affx has some great potential, but they need a hell of a lot of sales to support their market cap. If/when they get it they could be huge. However, their technology isn't exactly cheap and they may face competition from things like INCY's Combion ink jet gridding technology for instance. They sure have some great collaborations though. I keep thinking about buying some, but haven't yet as I've been buying others such as CYTO instead.
Keep in mind that you are playing Venture Capitalist and VCs always spread it around widely to minimize their risk exposure. Don't put all of your eggs in one basket. Or to be more appropriate: don't put all of your cell line in one freezer - a big thaw can be a real killer.
Hope this helps you some. Please feel free to do analysis on stocks you think are good and post them here for us to study. We don't always have time to dig up stuff on everything, and do plan to limit the number of stocks in the model. Also, since we need to own a stock before we put it in the model, that is going to be quite limiting in what we will add. Even though the Model is only on paper, either V1 or I, hold some of each stock. Since our funds are limited and both of us are pretty fully invested, we probably won't add that many more stocks. This week for instance, we added additional shares on margin of the stocks we already hold as we thought a bottom had been reached. I'm a margin monger, V1 is the conservative and buys with cash. He's the pro money man J.D., I'm the bioentrepreneur "Jack of All Trades, Master of Science". It makes for a good balance.
Later,
Rocketman |
