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To: Kevin Shea who wrote (16221)	12/4/1999 10:05:00 AM
From: OpusX	Read Replies (1) \| Respond to of 57584

Kevin...I agree with you 100% on your views of biotech. without exception since I started actively trading all my losses have been on high-expectation stocks. risk-reward ratio sucks. The price for positivity is already mostly priced into the issue so if news disappoints "fuh get about it" the stock tanks. I write myself notes to never buy these types of plays. Also agreed...huge amount of biotech issues out there...mind-boggling...TA useless as well...99% news driven. That said I enjoy DDing the research these companies do and maybe nibbling on a few shares. Example is CVTX. After big runup last month I waited for the gapup to fill, then purchased and consequently sold near top (profit often) then rebought a few shares at a lower price for IRA account and will just leave in there hoping for the companies future success (Its run back up near its high in the last few days)...I will speak to Prophet about constructing a watch list for biotechs and if he agrees we will keep the thread informed of possible opportunities. Xmas time looks good, if not then I hope to take a week off in January that might be a good time as an alternative. Regards, Robert

To: Kevin Shea who wrote (16221)	12/5/1999 12:50:00 PM
From: prophet_often	Read Replies (2) \| Respond to of 57584

On biotechs, agree that there are too many companies out there with obscure techologies that are difficult to understand. They are news-driven and often sell-off hard on news. They are very difficult to trade in the short-term. T/A is mostly useless for the biotechs, especially the 2nd and 3rd tier stocks. Therefore, I don't think they deserve to be discussed on a daily basis on this thread. Personally, I prefer to discuss short-term trading opportunities, T/A and market-timing ideas. Having said all that, there are still some excellent long-term profit opportunities in the biotechs, and since it is Sunday, I will attempt to outline my thoughts on this sector. IMO, the best strategy is to narrow down your list to the 2nd-tier companpanies with an enabling technology, a robust pipeline, partnerships with big pharma and products in advanced clinical trials. The product must serve a decent sized market where there is no adequate treatment available, or have a competitive advantage which will allow the product to penetrate that market. I like to use IDPH as a model for a biotech that has recently made the transformation from a development stage biotech, through product approval and finally to a profitable company. Five years ago, IDPH was trading at 2 bucks and change. In May of '96, they reported positive Phase 3 clinical date on their Non-Hodgkin's lymphoma drug. In '97, the product received FDA approval and in the last year, as the company turned profitable, the stock has moved from the 40's to the 120's. My picks for biotechs which can do an IDPH in the next 2-3 years are VICL, ISIP, and LGND. All three meet the above criteria: they have an enabling technology, robust pipeline, will likely announce late-stage clinical trial results in the next year leading to product approval and have a good shot at becoming profitable in the next few years. IMCL, ALLP and RZYM also look interesting. There are more, would like to hear from others and compile a list of companies that meet these criteria. In order to reduce risk, you need to build your position slowly based on key milestones the company achieves. Start with a small position and then add to your position, if and only if, the company delivers on the critical milestones needed to advance towards profitability. These include: 1)positive late-stage trial data which will support product approval 2)filing of the NDA 3)FDA approval 4)successful product launch If we look at the IDPH model, you would have had a chance to build your position at each of these milestones and still enjoyed the 3-fold move in stock price as the company turned profitable. The Prophet