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Biotech / Medical : Biotech Valuation
CRSP 61.96-3.2%Nov 3 3:59 PM EST
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To: Cary Salsberg who wrote (5143)12/14/2001 5:34:39 PM
From: Ian@SI  Read Replies (2) of 52153
 
Cary,

In valuing Biotechs, one needs to be very cautious re the cash on hand. It costs about $800M to gain approval for a new chemical entity(NCE). Small biotechs need to continually go back to the market to raise cash. The other alternative is giving away most of their rights to their most promising prospects.

Valuing the enterprise is more of an art than a science where most of the required information is difficult to uncover.
Evaluating their pipeline requires judgments about probable success; income from that success; what competitive treatment options exist today; or will exist by the time FDA approval comes along; and whether they're adequately partnered to effectively sell their product.

What led you into this sector from the Semiconductors / Capital Equipment companies?

Ian
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