NBI classification.
I could need some help here. I have had some spare time, so I thought one nice thing to do would be to aggregate quarterly financial figures for a number of biotech companies to see if there are any trends in the material. Yahoo provides some data that makes this feasible. It is not necessary to read all the 10Qs and 10Ks.
As my sample to represent the sector, I have chosen the companies included in the NBI-index with one or two exceptions (foreign). However, it becomes immediately clear, that Amgen is crowding out the rest. It doesn't matter too much what the others are doing, if AMGN goes in one direction or the other. So, I could use some kind of stratification.
What I think might be a sensible classification would be to divide the companies into the following groups:
- Giant super-profitable biotechs.
- Decent revenue generators. I have put an arbitrary limit at 100 mUSD in yearly revenue. Above that they are large.
Otherwise not.
- Somewhat smaller revenue generators. These are companies who have by and large managed to take the step from being pure development plays. They generate revenues, but don't have to be profitable. Most of them are not. They could represent an interesting investment opportunity as they often tend to become more appreciated once they manage to come over to the black side.
- The Rest. These are primarily development stage companies. Some of them do generate revenues, but I have guessed that it is not to be considered as a prime consideration, when they are evaluated.
There are a number of companies in the last group which very well may be allocated to the third group and perhaps vice versa. I am interested to have your opinions. There are quite a few companies here that I have no idea about.
My preliminary classification looks like this:
The superrich: AMGN.
The fairly successful (+100 mUSD): BGEN, CEPH, CHIR, GENZ, GILD, ITMN, IVGN, MEDI, MLNM, PCOP, QLTI.
The lower middle-class: AFFX, AMRI, ARQL, ATRX, CELG, ENZN, GLGC, ILXO, INCY, LGND, LMNX, MDCO, MOGN, MYGN, NVAX, PDLI, TKTX, TRMS, UTHR.
The strugglers: ABGX, AGEN, ALKS, ALXN, AMLN, ARNA, ARRY, AVGN, BMRN, CALP, CBST, CEGE, CRGN, CRXA, CTIC, CVTX, CTIC, CVTX, DVSA, EXEL, GERN, GNTA, HGSI, ICOS, IDPH, IMCL, IMGN, IMMU, ISIS, MEDX, NBIX, NEOL, NKTR, NPSP, OSIP, PRCS, REGN, SCLN, TELK, TLRK, TNOX, VRTX, VXGN, XOMA.
Let me have your opinions. Does this classification makes sense? And if so, have I put the companies in the right boxes?
If you are missing some companies like DNA and SEPR it is because they are not in the index. Should I include them? I can do that. If so - who else? We can perhaps make it into the BioMaven 100.
Erik |
