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Non-Tech : Bill Wexler's Dog Pound -- Ignore unavailable to you. Want to Upgrade?

To: Hank who wrote (8045)	7/5/2001 6:22:58 PM
From: BinkY2K	Read Replies (1) \| Respond to of 10293

Hank, I really appreciate your analysis. I am very skeptical of all the talking heads on CNBC and elsewhere. My first impulse is always to think of what THEY want me to do, and consider doing the opposite. Lately, I conclude we have some serious traders dealing with the entire market who want large swings and volatility while the market, as a whole, goes nowhere. My concern with some of the bigger biotechs is that some of them depend on large returns from a few blockbuster drugs and the new techniques could produce newer drugs that pull the rug out from under them. You are right that the new drug may well be grabbed by another big firm, or the same one. I am a bit partial to Eli Lilly, although I may be biased by their giving me a free vacation and tour a few decades ago and taking me to the Indianapolis Speedway! LOL! I look at the NAZ and I see all kinds of companies, not just the computer types that bubbled. Overall, the index was punished much more than the DOW and some big caps like CSCO got punished last. I agree the NYSE was not pushed nearly enough and could be due, but you could argue it did not rise as much. Cash can be king but the return has been shrinking lately. I can well see rates rising again if Greenspan worries about inflation as you described. The variations on price controls being used may backfire and cause more shortages. I took a bad day to travel. How much of the dump today is because many others took time off and low volume let the sellers choose to dominate. Maybe next week, when the sellers take vacation, ...

To: Hank who wrote (8045)	7/5/2001 8:05:27 PM
From: FML	Respond to of 10293

I believe that one company, Draxis Health ( DRAX ) is and will increasingly be able to compete in this biotech game. Their Radiopharmacological division is creating products that will be able to not only locate cancers,Circulatory problems, etc., but they will also be able to deliver a high tech bio engineered products for treatement. They haave spent the money necessary to create a tate of the art facility. Additionally they are now the beneficiaries of outsourcing from the major drug companies. My suggestion is that for $2 or so a share, it is worth everyone's while to spend a few minutes at the Draxis web site and listen to Webcast ( an view the slides ) from the June 2001 shareholder meeting. You will find a small company that competes quite well and and which has steadily increasing sales along with what the company states will be sustained profitability.

To: Hank who wrote (8045)	7/6/2001 11:14:52 AM
From: Biomaven	Read Replies (2) \| Respond to of 10293

Hank, You are probably right about the biotech sector. I fear it will leave many companies dead and buried just like the .com fiasco did. The problem is that many of the larger companies are so big and powerful now that they can literally overtake any smaller competitor within months if they want to. If the smaller company has a lock on patents that prevents them from doing this, then they simply buy them out, take the products, and lay off the people. How can a small biotech that is capitalized at only a couple hundred million dollars compete with somebody like Pfizer who is capitalized at 250 billion? They can't. Plain and simple. I couldn't disagree more. The fact is that the big pharma are desperate for pipeline in the face of their existing patent expirations and generally disappointing internal pipes. The "terms of trade" between biotechs and pharma have radically changed over the last five years or so. It used to be that the pharma would license early stage products in exchange for a single digit royalty - these were really nothing more than options without much commitment to develop the product. Nowadays, 50/50 deals are much more common. The biotechs are holding onto their products longer, and the vast majority of biotechs are financially much more secure than they used to be. Here's a sample post (one of many) on the Biotech Valuation thread I run that backs up this viewpoint: Message 16008130 When there are acquisitions, they tend to be at a significant premium and way above the target's lows. The pharma's certainly don't fire the people at the companies they acquire - there's not been one example of this that I know of and I've been tracking all pharma acquisitions for quite a while. BTW, we track merger activity on the Munch thread: Subject 24574 Finally, in response to Bink's concern about multiple pathways producing competition, again look at history. If you can develop a successful drug, your primary risk is an unexpected side effect or patent expiration rather than competition. Even where better drugs emerge, the original, inferior drug continues to do pretty well. (Look at the statins - the BMY drug still does a billion a year). In general it's very hard to show superiority over an approved drug - mostly companies just try to show equivalence. The bad news in biotech investing is that it's so hard to get a drug approved. The good news for those that already have an approved drug is that it's so hard to get a drug approved. Peter

To: Hank who wrote (8045)	7/6/2001 11:11:30 PM
From: aknahow	Read Replies (1) \| Respond to of 10293

<<As for the market, I am not convinced that we are out of the deep end as so many pundits would have you believe. Historically, it takes years for cuts in interest rates to have a lasting effect on the direction of the economy and I see too many pot holes still in the road ahead. Of major concern is the energy crisis. By all accounts I've heard, the rise in natural gas prices that we saw last winter will be even worse next winter and California's electricity problem is predicted to spread to other states, as well. You can't sustain a 0% inflation economy when the very fuel that everyone depends upon is going up 30%, 50%, or 100% in key economic territories like California. I am also not convinced that we've seen the last of a rise in gasoline prices. So far, gas prices have been restrained but all it would take is one minor set back in the oil production food chain to send prices up over $2/gallon. We haven't seen higher gasoline prices reflected in consumer products yet because businesses have been buckling down to control costs. For example, UPS, our nationals biggest package courier, has now expanded their delivery territories for each of their drivers and required that each delivery driver work and extra hour every day so fewer drivers can be used which, in turn, offsets the rising cost of fuel. Other companies have done the same sort of cutting back. However, you can only stretch people just so far. If gas shoots to $2/gallon, companies like UPS will have no choice but to raise their prices and THAT IS inflation!>>> You said rate cuts take years to have a lasting effect on the direction of the economy. Tax cut may take years but interest rate cuts can and do impact the direction in about a year, if long term rates fall in sympathy with short term rates. Home owners refinance like crazy and end up with greatly reduced expenses, corporations will also refinance callable debt. While elderly people who invest in certificates of deposits, money market funds and other fixed income obligations see their income decrease they were not spending their income at the same pace as younger home buyers. Governments cause inflation by printing money. If oil and everything that are made out of it go up in price, consumers will have less to spend on everything else and the lack of demand will cause those prices to fall. In addition the high price of oil and gas will lower consumption of those products, so consumers feel the impact only to the extent they do not modify their consumption. Once lived in a country with gas costing $4 per gallon. There was no inflation in this country. Its' currency remained stable and other prices remained unchanged.