Biotech Columnist with worldlyinvestor.com
Wong, Nadine Profile
Worldlyinvestor.com
Host: Please welcome Nadine Wong, biotech columnist with worldlyinvestor.com. For more information, visit www.worldlyinvestor.com.
Nadine Wong: Hello everyone. I know people have been interested lately in bioterrorism stocks because of all the concern and the campaign against terrorism. And people are more interested in this field, but I do think this is more of a hot topic instead of something to invest in for the long term. I'm rather more conservative when it comes to playing biotech stocks. I think bioterrorism stocks are left for the risk takers.
The Chat
Question: Do you see the threat of bioterrorism as having a long-term negative fundamental effect on the global economy?
I think people will eventually cope with it. It will become part of our daily lives. In the short run, yes, there will be some negative impacts on the economy. The mental emotions will stabilize and people will come to grips. It will be a new type normal.
Question: How have biotech stocks been performing compared to the broader market this year?
In the beginning of the year they sustained their values, and then concern over earnings, and then a lot of profit-taking happened. It was like the last sector that people took profit off of. We had a nice blend, 2000-2001, and then people started taking profit. So they have bounced back a little bit. They haven't been hit as hard as the high tech. And a few companies have done really well because they have new products that will have come to market in the next year. When you come to invest in biotech stocks, always look at their product pipeline. An example will be Gilead Sciences, Inc. [GILD] and ICOS Corporation [ICOS]. They are companies that have been able to sustain their values.
Question: Would you suggest investor's get involved in any of the stocks involved in bioterrorism security like Cepheid [CPHD]?
My only concern is it was great when it was trading around $2, and it shot up pretty drastically to around $8 and now it's fallen back to around $6. And I think that's too aggressive, too high. There is more risk of a downside more than anything else. Too many shorts out there. People shorting the stock.
Question: So you'd avoid putting money in Cepheid [CPHD] or Bruker Daltonics Inc. [BDAL]? If I had a choice, I would avoid putting money in Cepheid, based on valuation. They had a nice run up, too fast too soon. As for Bruker Daltonics, that one is a little expensive. The company is showing signs that they are growing revenues, that their profits are growing. The company and its business model is a little more diversified. Their business is done in life sciences and a little bit in biological warfare. If there is a pullback in the stock price to $15 or something like that, I think it would be a good buy.
Question: What is your opinion on XOMA Ltd. [XOMA], Celgene Corporation [CELG] and Human Genome Sciences, Inc. [HGSI]?
XOMA has had a bit of a setback because of a delay in filing for approval for their Xanelim for psoriasis, which I think the drug for treating psoriasis is actually very good. Investors who want to get into it and don't mind waiting for XOMA, I can see the stock going back to $10. Celgene, I like the company. I think if you can buy it lower than $25, that's a good value. I know that they have a trend of growing revenues and earnings, and their drug pipeline is based on Thalomid. It looks like they are going to try to expand to other diseases. Humane Genome I would rate it one of the leaders in genomics. I guess people are impatient with the company. If it falls below $35, I see this company being a good buy also. They have lots of money. And they have a chief executive officer (CEO) that has vision. And if you don't mind being a buy and hold, I think that Human Genome Sciences will do well for the investor.
Question: What are your comments on Affymetrix, Inc. [AFFX] and Dr. Reddy's Laboratories Limited [RDY]?
I don't have much to say on Dr. Reddy's Laboratories, but Affymetrix has been a bit of a disappointment for me. I was expecting it to become profitable sooner than they projected. The products are wonderful; they are the leader in cutting technologies. I do think that the environment of this economy hasn't affected them, competition. I get the feeling that people feel that they are primarily into chips and they think they mean computer chips, and what they really do is DNA chips, and that gets investors confused. But I know that there is still value in what Affymetrix does, and if it falls much lower then I would pick up some shares of it. About $15. |
