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Biotech / Medical : VD's Model Portfolio & Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: jeffbas who wrote (7054)	9/14/1999 8:06:00 AM
From: Harold Engstrom	Read Replies (2) \| Respond to of 9719

Jeffrey, Sepracor has no positive earnings to compliment its pipeline. Other larger cap biotech stocks like Amgen, Biogen, Genentech, Genzyme, Immunex, etc., do have positive earnings as well as promising pipelines. Lack of earnings makes biotech and pharmaceutical stocks subject to huge earnings swings. The pattern I notice is: 1. IPO, pre-clinical or early clinical: runup in price. 2. Some results: decline in price. 3. More results: no action followed by gradual rise. 4. Approval: runup, then decline. 5. Real earnings: no action, then gradual rise. 6. Significant earnings expansion: gradual PE expansion. After #6, there is still volatility, but more closely mimicing the market or its sector. Personally, I think Sepracor is doing pretty well. They are basically at #4 and #5 is still about 2 years out, with #6 apparently following quickly. The company seems to be building a foundation one brick at a time: it has a couple of approvals, fair licensing deals and a very broad pipeline. As Peter has pointed out, their ICE approach appears validated again by CELG's recent results (Ritalin ICE). Sepracor is one of my favorite stories and I can't believe its not treated like a dot-com.