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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: drew_m who wrote (30212)	8/21/2000 12:51:00 PM
From: Seeker of Truth	Respond to of 54805

Every time I turn around I hear biotech biotech ... In the pharmaceutical industry some kinds of research are marginal in the expected pay off. The companies prefer to have some of the expense borne by others. One way is to get a university to provide the people and lab; the company tops it off with some cash and the products if any belong to the company, mainly. Another way is to let the eager speculators (aka "investors") pay for it. The venture company does the research. It is financed mainly by those who buy its shares at each new offering. The drug company again provides part of the financing in return for a big chunk of the profits if there is a product. My advice for those who are looking for a gorilla there is that if you want to advance pharmaceutical research simply write a fat check to the order of Merck or Pfizer. These companies are serious about research. OR you could help them by buying into one of the satellite research companies. You won't find a gorilla and you won't, statistically, make a profit but you will be advancing molecular biology. This being the case why do you hear biotech biotech everywhere? It's because decreasing the scourge of disease and lengthening life is the most entrancing goal of research, far more exciting than broad band communications or superfast computing. All this said, there is a biotech infrastructure company, ABSC, which is profitable and does not follow the above pattern. Their forte is high speed testing of potential drugs. Lots of high profile drug companies are their customers. But there are few barriers to entry; it's just a matter of hard work to get skilled in the technology, patents don't mean much. There is no discontinuous innovation, no product that EVERYBODY must use. Biology is infinitely tougher than physics.