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

To: Icebrg who wrote (5334)	1/4/2002 3:41:14 PM
From: Biomaven	Read Replies (2) \| Respond to of 52153

I was perhaps a little flippant when I dismissed my original "short answer is BMY" response. As general-public biotech investors, we are normally operating under a huge handicap. We simply don't have access to all the information that would enable us to make a truly rational decision about a drug candidate (until we see the FDA briefing documents and an Advisory Committee transcript, that is). Until that point, we are operating mostly in the dark, with only a few scraps of light that the company carefully chooses to shed, plus a few conference presentations and/or publications, also entirely written by the company. (Plus of course the basic science, especially for those like Miljenko, Rick and Biotech Jim that can judge this accurately). Add to this that even the very best companies spin their results, and the not-so-good companies sometimes are outright deceptive. So that's why I prepared to defer to BMY's judgement here. They had access to all the data and had every incentive to scrutinize it thoroughly. That doesn't mean to say they (or other big pharma) are perfect of course, but you have to accept that in all probability they were able to do a better analysis than we can with our limited information. It's easy to say in retrospect they must have missed something because of the rejection; however investment decisions cannot (unfortunately) be made in retrospect. Peter

To: Icebrg who wrote (5334)	1/7/2002 4:23:53 AM
From: Icebrg	Read Replies (1) \| Respond to of 52153

Lex: Biotechnology Published: January 6 2002 20:43 \| Last Updated: January 6 2002 20:44 The market reaction to last week's news of cloned piglets and Dolly the cloned sheep's arthritis again highlights the risks, volatility and news-driven nature of the biotechnology sector. But there are signs that biotech is coming of age. After the frenzy of initial public offerings and soaring valuations driven by the race to map the human genome in 2000, a bumpy ride last year has left biotech companies on more realistic multiples. Several factors could spark investors' interest. One is consolidation, after December's Amgen/Immunex, Millennium/ Cor and MedImmune/Aviron deals. The need to augment product pipelines, reduce the inefficiencies of multiple corporate overheads, and increase liquidity to attract big investors may drive further merger and acquisition activity. Amgen/Immunex, in particular, shows biotech companies starting to act more like the big pharmaceuticals companies, by buying in growth products. It creates a group, at $75bn, starting to approach "big pharma" in size. The balance of power between biotech and big pharma seems to be shifting. What biotech has, and pharma lacks, is lots of late-stage products - an unprecedented number should hit the market this year. The big drugs groups' desperation to get hold of such products is shown by the previously unheard-of sums now being offered in licensing deals. The IPO boom of 2000, and continued inflow of private capital last year, has left most biotech companies well-financed. And the development of specialist biotech funds and departure of retail investors have given them a more stable investor base. The lessons of the technology bubble have left investors favouring stocks with real revenues or earnings (or at least with revenue-generating products close to launch) over pure technology platform companies. Those seen as likely buyers or targets in M&A deals could attract attention. news.ft.com