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Biotech / Medical : Immunex
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To: scaram(o)uche who wrote (517)3/28/2001 10:30:31 AM
From: aknahow   of 656
 
Snyder's point about the worthlessness of discounting uncertain earnings is entirely correct. This is not a slam at biotechs. If anything it is a slam at the very investment broker/dealers who are prone to use present value models to arrive at price targets for biotechs.

The discounted value of future earnings requires a great deal of certainty that the earnings stream is there. When we have just seen post indicating that research goes to expenses immediately, even if one knew the future size of the market, the market share of the company's approved drug, unless one could tell the future research annual research budget discounting projected earnings would have little meaning.

True, I can't tell one biotech from another, but I can tell b.s. analysis, even when it provides a high target price to XOMA.
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