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Biotech / Medical : Biotech Valuation

CRSP 54.94

-0.3%

11:08 AM EST

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To: tom pope who wrote (6596)	6/20/2002 6:27:08 PM
From: David Howe	Read Replies (1) of 52153

I'm not sure that the Briefing article is all that valid. Biotech companies can produce products that are patent protected and immune to direct competition for the most part. Pharmacuticals are an industry that has proven to be profitable. Comparing this industry to the dotcoms is silly. That industry has not been proven to be profitable and almost every single company that went from boom to bust had no way to protect themselves from competition. Anyone can make a web site, not everyone can discover and market drugs. The value of a company is based on more than the current sales. Many of the companies he lists are just beginning their product launches. Many have almost as much cash as their market cap. Should a company that just launched their first drug trade solely on a PS ratio based on that one drug or should they trade based on the future value of their pipeline? Obviously they should trade based on future sales. Looking at current sales is extremely misleading in many cases. IMO, Dave

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