Rick,
Since you asked for my inputs.
First, I've had my share of blunders. ARQL has been my main debacle of this year. DEPO last year, fortunately I've had some successes mixed in. I only hold a small handful of biotechs at the moment.
First, I am a big believer that when investing in biotech there is a lot more than science to judge. To be successful (as a stock) a biotech needs a strong product pipeline (preferably lower risk) AND strong finances AND astute management. Of the biotech universe its my opinion that 90% are utter crap whose sole purpose is to waste shareholders money by pushing forward terrible products with no chance of commercial success. So for 90% or so of biotechs, this sector carnage is deserved. A healthy cleansing process is long overdue.
Another one of my biotech rules, is to avoid cash poor biotechs WITH low share prices. When caught in this vicious cycle its very difficult to emerge. See almost any Rosenwald company.
Brief comments on your T/FIF portfolio.
MOGN: I don't like. I agree that Salagen is a nice little product, however I am skeptical of their cancer programs. So salagen alone is probably worth the market cap, however all those cash flows are going into very high risk programs. I don't think salagen alone can get the stock much higher, of course that one day cancer hype did.
Your other picks either fall into or are perilously close to falling into my low price/low cash category. I can see the virtues in each, however I would question their business savvy. ARIA struck a great deal with HMR but they are spending furiously and will need to raise cash likely within a year. XNVAY is an interesting company but they need cash within 6-7 months by my count. I am not sold on SIBI. Nice pipeline, valuable patents, but do they have the management to make it work for shareholders?
The other portfolio is more my style. I currently own 2 on the list and am looking to re-enter at least 1 other. The only one I don't particularly care for is AGPH. Viracept is certainly a decent drug. However margins suck and half the profits go to JT, so sort of a double whammy. I am not keen on the rest of the AGPH pipeline. I don't like the MMP or remune. I also believe the recent inlicensed drugs have far more developmental and commercial risks than AGPH bulls wish to admit. IMO the oncology tracking stock is an accounting ploy and will be a great short. The separation should help AGPH general stock, but I still would not be a long term holder. I don't see a huge upside here. PLEASE DONT RESPOND TO MY SLANTED OPINION.
PGNS is probably my best idea at the moment. Their lead drug has huge margins (85%), low variable costs and a nice market potential. EPS will grow sharply over the next few years.
GELX looks good. Renalgel is a very good drug and will have a nice market potential.
ALKS is getting very cheap, as are VRTX, GLFD, GILD, all are flush with cash.
I don't know much about REGN, BCHE and PCYC. I do believe analyst eps projections for PCYC are out of line with reality.
I believe MLNM is the cream of the true biotechs. I am a long term holder of MLNM although I have not fared well yet.
Some other stocks to ponder would be MCDE, KDUS, ARQL, AXPH, CEPH all are cash rich with low share prices and have their own virtues. ARDM looks good to me as well.
Jim |
