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Biotech / Medical : Biotech Valuation
CRSP 53.54-3.1%Nov 18 3:59 PM EST
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To: Londo who wrote (2358)12/21/2000 2:15:12 PM
From: tuck  Read Replies (1) of 52153
 
Londo,

MCDE will be getting slightly reduced funding from the various agreements, and the burn rate will increase slightly, IMO. But as Rick points out, the R&D -- not just the results, but the infrastrucure/bodies -- have some value above zero. They would make a good fit for several companies and would be a good bargain even with a hefty premium from today's $4. Figuring they have roughly one year's worth of cash. The time to do a deal would be in the spring, in the sweet spot of seasonality, and before their balance sheet looks desperate. Hopefully riding promising news of entering clinic with a compound or two and related small milestones. Then I'm expecting it to be in the high single digits. Then I'm out or half out. That's my plan.

Biotechs that missed the bubble this spring to finance are munch candidates for the ones who did not. CEGE is indeed in the latter position. Pretty confident building a factory with nothing in PIII. Any customers besides themselves? VLTS PEGging technology gets wins, but I wonder about further patent battles in that space. But small caps at lows with good science & solid IP look like bargains relative to the bigger caps that have resisted lows and will likely recover first. But not as well, IMO. Hence I'm buying the small caps and trying to be patient for a few months with those.

Cheers, Tuck
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