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Biotech / Medical : Biotech Valuation
CRSP 61.96-3.2%Nov 3 3:59 PM EST
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To: Miljenko Zuanic who wrote (3319)4/3/2001 9:13:27 AM
From: Biomaven  Read Replies (1) of 52153
 
And after that brief interruption for some spam (that China message was posted to a bunch of the hot threads), we return to our normal programming. <g>

I've had a chance to read Lehman piece form Lehany. Bottom line is she looked at the PEG's for the top tier biotechs (2.4) and arbitrarily decided they were too high - new targets are at a PEG of 2. (Say, I wonder how you do a PEG for a company like Intel or Cisco that's about to have negative growth?).

I can't really argue with her conclusion that some of the second tiers have a better risk-reward ratio. (I own both SCIO and ITMN in reasonable size, but not her third top pick, GILD).

She also slashed her targets for a bunch of stocks even where she maintained a "buy" or "strong buy." This is mostly because her previous targets were quite unrealistic (e.g., PDLI $170 reduced to $58, ABGX $115 reduced to $30).

Of course the wire services have focused on something else she did - her "back up the truck if the stocks drop to these levels numbers." In this environment, that's about as irresponsible as those $1000 targets for the high flying Amazons and QCOMS during the bubble.

She does some weird attempts at valuation ("HGSI's pipeline is worth half of DNA's"). Mostly I think the valuation efforts are done after the price targets are set.

Peter
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