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Biotech / Medical : Biotech Valuation

CRSP 55.26

+1.2%

3:59 PM EST

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To: Cary Salsberg who wrote (6615)	6/22/2002 3:27:40 PM
From: Ian@SI	Read Replies (1) of 52153

Cary, Many of the emerging biotechs mentioned on this thread have no approved products, or none of blockbuster status yet... The assets being valued tend to be their Intellectual Property, the reputation of their scientists and management, the quality and progress of their pipelines. Until a significant drug is approved, the assets are intangible at best if not abstract. How the market values such assets at any particular point in time is subject to its whims and fancies. So when it sees some rascals (is that spelled, "Waksal")behaving in a morally bankrupt fashion, the sector gets tarred with that brush. Similarly having a leaderless FDA isn't helping valuations -- A setback for one company seems to affect the sector. And if that wasn't enough, the market seems to fear that the Government will stick its fingers into the pie under the guise of improving prices seen by consumers. The latter may well pass once November has come and gone. Without an informed scientific medical opinion, investing in this sector is little better than buying a lottery ticket. And even with an informed opinion, the stock prices are still subject to whims...

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