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Biotech / Medical : Biotech Valuation
CRSP 52.97-1.0%10:55 AM EST
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To: greedsgd_2000 who wrote (1636)9/15/2000 11:09:39 AM
From: Biomaven  Read Replies (1) of 52153
 
greedsgd,

"DISRUPTIVE BIOTECHS"

I only have a cursory understanding of what this means, but I'll just take it at face value for now.

Of course to some extent the entire biotech industry is disruptive from the point of view of the established big pharma. Less bureaucracy, greater willingness to embrace new methods, to overlook the current bottom line and to spend more on R&D, combined with (on average) probably smarter scientists.

For the purposes of this discussion, it is probably good to divide the industry into two parts - the new drugs it makes and the methodology it uses to make them.

Now a new drug or class of drugs clearly has the potential to be disruptive. Thus say the COX-2 inhibitors (Vioxx and Celebrex) were clearly disruptive to the existing class of NSAIDS. However, my sense is that this is not the sort of disruption that would catch the Biocosm eye.

Perhaps a better example would be the forthcoming "non-toxic" anti-cancer drugs as replacements or supplements for the existing chemotherapy drugs. Another example is the slew of therapeutic Mabs that are arriving.

My guess is that the mouse-Mab companies (MEDX and ABGX) are good candidates for what would be called a disruptive technology. (Although of course the "old-fashioned" PDLI is doing just fine.)

On the methodological side, there is clearly a lot of disruptive stuff, with the genome-related area being a big driver. Perhaps MLNM is the best example of a "genome to drug" company. Perhaps VRTX's methodology can also be viewed as disruptive - the survival rate of their compounds into Phase II is amazing.

I guess I remain to be convinced that this is actually a useful way of figuring out "objective" valuations, but to the extent it drives subjective valuations I'm certainly happy to play along.

Peter
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