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Biotech / Medical : VD's Model Portfolio & Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: Vector1 who wrote (9177)	3/10/2002 2:27:38 AM
From: Spekulatius	Respond to of 9719

<< Maybe I have lost the touch and should just give up shop.>>I would hate to see that and I am sure many Biofreaks would second that. I have left some of my own money on the Soltara altar so i understand your frustration. Clearly the rule of the games have changed and I am trying to reconsider the risk of the biotech stocks i own. Hedging may be a good idea - i considered doing exactly this and putting a floor in my SEPR stock by hedging with out of the money puts but never followed up. Another way to reduce risk would be add more mature specialty drug companies to the mix. ELN, SHPGY and FRX etc. (and to some extend even CELG) fit the bill.

To: Vector1 who wrote (9177)	3/10/2002 5:44:48 AM
From: Rocketman	Read Replies (2) \| Respond to of 9719

Never give up V1! Biggest problem here was that you were too in love with SEPR and let it become too big of a portion of the portfolio. You kept adding more when I really thought you should be diversifying more. I think that your hedging should be a broader basket of stocks. Biotech is so volatile, that I'm not sure the 15 stock target you set originally is broad enough to spread the risk, regardless how hard it is to follow more stocks than that. It's the old VC philosophy of one or two winners out of every ten that are big enough to pay for the eight or nine losers. I'm not sure the intensive following of the stocks is better than having exposure to three times the number of companies that you just don't follow quite so closely. Face it, with this pre-FDA stuff you are public VCs in these stocks. Now, when you talk about the FDA, they have been screwing everyone lately in a very public way. I don't thinks have really changed that much there, just that it is becoming more obvious. When I was at Norian over 10 years ago, they mislead us repeatedly that we could 510.K a dental product to market (a no clinical quick approval process). They kept us believing that through 4 rounds of filing and then getting asked a stupid question to delay the process. At the end of the 4th round and over a year and a half of wasting our time they finally told us that we'd have to do full blown clinicals. Not because of anything in the data, or any real concern about risk, but just because. That was right in the early stages of a period where they just about completely quit approving medical device filings. Will the FDA ever get a commissioner? Bush is too busy filling up nuclear missles with new targeting data to worry about something as trivial as management for the FDA. What really needs to happen is to unpoliticize the FDA and get it spun out from under the White House with non-political appointee longterm management. The current examiner scheme seems to be to just keep rejecting and delaying and making an excuse to build up their staff and their fiefdoms further since there is such a backlog of work building up. For example, will Aviron ever get its flu-mist vaccine approved. They have been screwed over for years by the FDA. Just plain UGLY!!! Oh, by the way, on the long term, I'm not so sure that SEPR is beat and won't come back with what they need to satisfy the FDA in a year or so. Rman

To: Vector1 who wrote (9177)	3/10/2002 5:58:08 AM
From: Rocketman	Respond to of 9719

When I saw how SEPR dropped, I thought that it might make the deadcat bounce, and sure enough it did. Interesting chart. Look at both Thursday and Friday and you will see how they drop at the open on all the market sell orders placed during the previous night, but shortly after that initial opening sell off frenzy, the bounce occurs as it hits bottom, the surge in sell volume dries up and the stock gets a little spike. You want to buy in the few minutes after the opening market sell orders are all filled. On a deadcat play you don't want to try and get greedy, just a small quick return of a couple of percent. It's one of those plays where an hour or two is a long time to be patient and hold the stock. For instance on Friday, just minutes after the open the stock hit its bottom for the day. Within half an hour it is up about 5% as the daily bargain hunters are picking up shares, it then slides all day long and ends up closing just a bit above its morning low. I don't have a daily chart of Thursday up, but from the 5 day it is still clear that this pattern also prevailed on Thursday, with even a bigger chance for a gain. Pretty typical pattern for a stock that just lost half its valuation in a new driven event. Just the vestiges of a market overreaction. Rman

To: Vector1 who wrote (9177)	3/10/2002 1:33:24 PM
From: jayhawk969	Read Replies (2) \| Respond to of 9719

Vector1 I only partially hedged and I still lost my ***. In retrospect I should have done more, and will next time. My other concerns are BTRN and NBIX. BTRN is running out of cash, and NBIX has 2/3 of its valuation riding on insomnia. BTRN does not trade options, hedging is damn difficult. I do not expect good news (nor bad news) on the earnings release on 3.14.02. My gut is that SEPR will still be a big winner, although it is clear there work is now cut out for them.