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

To: Harold Engstrom who wrote (4889)	11/6/2001 1:05:38 PM
From: Biomaven	Read Replies (1) \| Respond to of 52153

I'm with Harold on this one. At worst they can always buy some stock back if they can't find a good use for surplus cash. I'm not saying "too much" cash is a good thing, but clearly "too little" cash is a bad thing. In some market conditions, not having enough cash on hand to survive a few years can be a huge negative. It is true that falling interest rates will hurt the earnings of the biotechs with large cash positions. But if we're heading for a deflationary environment with near zero interest rates and dropping prices, the pharmas and biotechs are still going to be in a better position than virtually any other sector of the economy (except bankruptcy lawyers of course. <g>) It's somewhat less clear to me why the profitable biotechs keep so much cash on hand. Maybe to stop their Compensation Committees from whining about not having enough cash to give executives big bonuses. <g> Peter