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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Michael Young who wrote (3270)	4/1/2001 4:05:54 PM
From: Biomaven	Respond to of 52153

I just find the attacks against bearish articles tiresome. I agree that overall there is a double standard - when someone writes a bullish article, nobody complains, but when someone writes a bearish article there is generally immediate antagonism. The key issue in biotech is that everything takes place against a backdrop of uncertainty and secrecy about how drugs are progressing through development. In this context, it is easy to manipulate the biotech stocks by spreading unfounded rumors and half-truths. (See my old Biotech vs. Shorts thread for more on how this happens). Thus while I have no problem with an outfit like Avalon doing good research on a company and then recommending a short, I do have a problem with people that try to profit by shorting a company and then bad-mouthing it, irrespective of its actual merits. Now Greenberg hasn't focused much on biotech, but he has written a couple of stories that I would characterize as simply passing on such bad-mouthing. When attention was drawn to innaccuracies in these stories, he declined to correct them. Shorts, like vultures, serve a useful purpose in the ecosystem. If people could easily short IPO's, I suspect many of the excesses of last year would have been ameliorated. Part of the reason for the sharp biotech boom and bust last March was that the shorts had been flattened, and so there was no short covering to stem the decline. Bottom line: I don't like people that attempt to hype stocks; I don't like people that attempt to badmouth them. Greenberg has done some good work in exposing some hype but I feel he has also not always been responsible in his (second-hand) badmouthing. Peter

To: Michael Young who wrote (3270)	4/2/2001 12:29:32 AM
From: Miljenko Zuanic	Read Replies (3) \| Respond to of 52153

While I agree with majority of the statement in last dozen posts, I do have bit different view. I do not care what next to me guy on street think, much less what TSC, Cramer and Cramer-likes think and say about bio-sector. Even what large brokerage houses (including WS) do and how they do to influent short term move in bio-sector. More importantly to me is what CEO, CFO, COO,… thinks and how they act in given situation. They are instruments of the sector growth. Are they protecting their own ass/interest and at what price, relative to companies business prospect and survival/growth path in very competitive field. << Biotech is in a better position than ever because most of the companies were able to raise so much money last year. I suspect that enough will become big winners, even if the majority fade to oblivion eventually.>> Contrary, I am starting to think that many bios (not all) are in somehow relative worse position now (when banks accounts are fat) than when they have to fight for money. If I (CEO) have money so it does my competitor. Two years ago we have natural selection: “succeed and you will be awarded, fail and you are dead”. Now, we are talking about long-term survival (with cash reserve). Natural balance is disrupted. Companies which should disappear from scene are re-emerging, diluting sector. Exponential growth in R&D expenditure (if one want to stay competitive) will burn cash fairly fast, while magnitude of the results will not follow by some rate, imo. Can anyone pinpoint to bios single program/project or platform business plan (or combination of few) where it is clear that they have technology advantage, higher probability rate for success, and that they will be able to differentiate from rest (MLNM is excluded)? Time of the huge $$BB drug is gone for the +95% of the new drugs which will come to market in next one or two decade. Be happy with $200-300 MM drug. But, you will need +3 (if not 5-10) of this drugs to survive. IMW, the only way out is CONSOLIDATION. COMBINE, instead COMPITING. What is SYMPLE than this? If this fail in next two years, many today sector investors will come short. Because very few have ability to select winners, and even than they are +50% wrong. Miljenko PS: Sorry to repeat old story of my, but I will continue with the some broken record until sector does move in my direction, regardless am I correct or wrong.