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Richard. For better or worse I opened a small position in SIBI at 4 3/4 today. I was looking at a stock with $3 in cash, valuing the technology at $15 million. I don't know where the trials will lead, but watching CA tumble $18 today, one assumes risk in any equity. However, as with BTRN, the downside in SIBI is substantially less than $18. And, if the Alzheimers's or Parkinson's indications, or another collaboration occurs...well...that's why I look at biotech. BTW, any idea as to the size of equity position in Cognetix. It's funny, I saw that NXCO was priced at $37, due to the rise in Elan. NXCO, as a biotech, with a product in Phase 3, was worth $15-$21 As a pharma stock, it suddenly becomes a $37 stock. Little of the severe decline in biotechs makes a great deal of sense. Elan pays $700 million for a company in Phase 3 trials, and the market is unimpressed. In watching biotechs, I have never seen a lower valuation placed on R&D or technology, or for companies in clinical trials. This despite numerous successful product launches, e.g., IDPH, MEDI, SEPR, AGPH, etc. You could have bought Yahoo for $40 for a long time. I'm not saying biotechs will emulate that performance (though I wouldn't complain)...However, at some time, I believe that the psychology will change and the valuations will reflect the worth in the technology. |
