Biotech Valuation Message Board

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Biotech / Medical : Biotech Valuation

CRSP 53.33

-0.4%

Nov 26 3:59 PM EST

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To: Mark Bong who wrote (3113)	3/16/2001 3:27:58 PM
From: opalapril	Read Replies (1) of 52153

"what industry has more growth prospects that biotech. I can’t think of any!" Depends on whether by "prospects" you mean within the normal life span of a human investor. The difficulty with your macro view, I think, is that it's very much out of sync with the "new-old" fad of valuing all companies by earnings and immediate (read: next quarter's) prospects for earnings, not long term prospects or lovely stories. The vast majority of players in the biotech industry for a whole host of reasons rarely can point to immediate earnings growth. Add to this the other unique albatross around the neck of biotech drug discovery companies -- the FDA's frivolous insistence on scientific proof of safety and efficacy (I'm joking) and the consequent snail's pace of new drug approvals -- and you have an industry that is most definitely falling out of this market's bed. If the prevailing market mood (or insanity, if you like) persists for long we may be reverting to an earlier era where every biotech but the profitable ones remained at best a cut above penny stock status and were driven to MA activities to survive -- selling out to large pharmas or merging with each other for protection.

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