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As Jane Jackson said, buying biotechs is an entirely different ballgame. The big biotechs: AMGN, AGPH, BGEN, IMNX are the safe bets. They can do it all. Invent compounds, develop them, and market them on their own. And they have all done very, very well recently. Others, such as CNTO, have a lot of support on Wall Street and make for great traders. In the smaller biotechs, I look for a killer pipeline of compounds preferably in the later stages of the FDA approval process, an ability to either obtain new killer compounds or invent them in house, a management team that's focused, smart and able to get proper financing to keep the company running through the unprofitable periods (without giving away the boat), partnering agreements with major pharms, and a development team that is successful at working a product through the FDA. There are potential homeruns, to be sure, but they take a long time to develop. Thus, there aren't many. And for every runnup, there's a boatload of shorters ready to take the stock down again. Look at Entremed to get a sense of what 'potential' in biotech can mean on any given day. I have invested a lot in biotechs recently, have traded some, but I totally agree with you that this could be a big year for many. |
