R&D spending has zero value, as soon as it is spent. It does, however, have a (highly uncertain) potential future value.
You don't detect any contradiction in those two statements? The value of any spending is the NPV of the expected returns from it. Granted, in biotech those are very hard to determine. But if they don't have an expected value substantially greater than the expenditure, you need to find new managers. On average biotech R&D spending has been productive, not destructive.
At this point, IMNX is very much going to be trading based on what the revenue flow from their existing product for the existing use is. How quickly they can ramp up production is going to be the key issue driving the stock over the next year, IMO. How Enbrel does in psoriasis will be the other big factor.
I've never owned IMNX before because I always thought it was too expensive. (For a couple of years I was quite wrong in this judgement; only more recently have I turned out to be correct.) But when it traded around $10 I couldn't resist.
I think JNJ paid a fair price for AZA, but then I own AZA <g>. (AZA is not a generic drug company at all, BTW).
Peter |
