Neurobiological Tech (NTII) Message Board

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Biotech / Medical : Neurobiological Tech (NTII)

NTII 0.0001000

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Mar 7 3:00 PM EST

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To: Apache Indian who wrote (404)	12/22/1998 10:59:00 PM
From: BRAVEHEART	Read Replies (1) of 1494

Hi Apache Indian, I'm sure it has been a tough period. Biotech's are a trying investment. I primarily invest in biotech. The sector is rather interesting with significant potential for returns. It does contain it's pitfalls however. I follow as many biotech companies as is humanly possible. I have learned one can profit from both good and bad companies if you play your cards right. Sure one can get burnt along the way but learn from it don't give up. You have to diversify in this sector. Some stocks offer returns because of investors who little understand the sector rush ( timing is everything to investing ) to invest in the next miricle cure even if it is only R&D with considerable risk & many years away from FDA approval ( Geron comes to mind though the list is long ). Others invest in company A or B because a certain product or products in clinical trials offers the promise of successfully passing through clinical trials and getting FDA approval ( NTII is also one among many ). Of all the bio stocks I have invested in the past year only two turned sour on me ( in fact the risks were known and considerably higher than they are with NTII ). Not bad actually in light of those that turned out good. In light of many of the biotecs I follow this issue is by far the most undervalued relative to risk. Of course this is assuming an entry point between .50 and .75. Why, because just about everything that could go wrong has and everything that can and will go right should with a relatively high degree of probability. The company had a high burn rate fell short of cash and was consequently delisted. Now a new CEO has come in and cut the burn. Focused the companies strategies. Formed a key alliance with MERZ which offers the company collaboration leverage ( To collaborate Memantine for several indications addressing an extremely large patient population ) not available to other biotecs similarly situated. The question is not if and how little but when and for how much! You have to step away from your initial investment for a moment and learn from it. Then you have to reconsider the company now. The new CEO. The reduced burn. The low number of shares outstanding. The product { it's potential ( I consider relatively high for a company with so few shares outstanding ) & risk profile ( which I consider low given it has proven pathways ) }. How advanced the product is in Clinical trials. Now ask yourself would you invest in this company now if you came upon it for the first time at it's existing shareprice. I personally believe the company will close a deal with Big Pharma jointly with MERZ in the first several months of 1999. I also believe this will help those who chose to invest based upon Big Pharma's evaluation of a products potential to properly value NTII. I am currently comparing NTII to many of the Biotec with less than 10 million in revenues and those with greater than 10 million in revenues ( keep in mind the many sources of revenue ). Once NTII forms a collaboration I should think that it will have the potential to trade in a range of from 3 times to five times it's up front cash per share payment ( not total amount including milestone payments ). Some trade as high as eight times ( your spikes ) that value but usually only around FDA approvals. Or when Hype sends it so high or even higher. Once FDA approval and market penetration is achieved a multiple of between five and eight times revenue per share is plausible based upon a sketchy comparitive analysis. Sure this is being optimistic but the potential clearly exists. To me this is an ideal investment. The timing is perfect. The price is right. The management is superb. The product is more than promising it is semi-proven. The company structure is investor friendly. Ultimately long term the potential for returns is significant. Now is not the time to get cold feet but to put them to the fire. Jeffrey

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