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Biotech / Medical : Munch-a-Biotech Today -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (512)	7/29/1999 11:38:00 AM
From: LLCF	Read Replies (1) \| Respond to of 3158

<Personally I think that the way R&D is accounted for in biotechland is misleading. I would much prefer to see the method they use for oil and gas exploration - you capitalize expenses, and then write them off if you have a dry hole> I agree, theoretically this makes the most sense to me.. very basic matching of expenses with the revenues it produces... on the other hand, now that the 3rd tier has blown their 100mill, an aquirer will be glad it's written off and gone forever... especially since the stocks have followed their cash on hand straight down :). DAK

To: Biomaven who wrote (512)	7/29/1999 12:00:00 PM
From: Harold Engstrom	Read Replies (1) \| Respond to of 3158

re:"I would much prefer to see the method they use for oil and gas exploration - you capitalize expenses, and then write them off if you have a dry hole." Peter, there is that school of thought out there. For some companies that usually hit something when they drill, this works. For companies that don't usually hit something or are only drilling one hole, this approach is less valuable. It works for Amgen or Biogen or AHP. It doesn't work for AlphaBeta or Oravax or Immulogic or CBMI or others. The cases in the middle are tougher. I think that you could use the method in cases that you feel are appropriate because you can discern those cases. But, less discerning people tend to apply rules universally or inappropriately. And that brings us back to square one in terms of finding another good guage to measure companies and performance by. Harold PS - Back into SEPR and into GLIA.