I've looked at the other companies you guys mentioned in this folder, based on my seven criteria. Summarily, the reason to own Cell Genesys instead of something else has to do with the difference between "playing around" and making a real business out of gene therapy. Wall Street doesn't reward playing around, at least in the long run.
There is also an eighth criteria I didn't mention (but added below), which is "has analyst coverage". This CEGE has, no doubt because it meets the seven criteria I list.
Evaluate for yourself all the items I suggest. When I did this, it made me want to buy more Cell Genesys; I'm happy to discuss each of these with regard to other possible investments:
(revised) Criteria for evaluating biotech investments:
1) Overall, relative market capitalization given prospects. Thus, if there are a few gene therapy companies trading for peanuts, and at the same time investors will pay huge sums for hundreds of Internet stocks, I see opportunity (potential for high demand but small supply of shares).
2) Partnerships.
3) Milestones, and milestone payments. Quality of milestones -- are they announcing results from a test tube, or from clinical trials?
4) Breadth and applicability of technology; potential for revolutionary product introductions.
5) Track record (how long a company has been doing work in an area).
6) Balance sheet. Are they strapped for cash?
7) Buyout potential, given all of the above.
8) Analyst coverage. |
