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

To: Robohogs who wrote (6610)	6/21/2002 8:40:24 PM
From: John Metcalf	Read Replies (1) \| Respond to of 52153

As to valuing biotechs with no profit.... There would never have been a biotech industry if the companies needed profit before they could IPO. The nature of capitalism is that people put money at risk, based on the hope/expectation of gain. Jeeze, Jon, I wish I had bought Amgen when the stock price was going through the roof with its first product and no profit. Rick Harmon has commented on this many, many times. I remember him talking about owning Amgen in the single digits "pre-split, pre-split, and pre-split". As I remember, each of those splits was 3:1. My memory is overcrowded and super-annuated, so I looked up Amgen's valuation history in Value Line. In 1985, AMGN's market cap ranged from $64mm to $220mm. If you bought and held at any time during that year, your minimum return would be 218 times your investment, and perhaps as much as 600 times. A few thousand bucks back then would have made you wealthy now.

To: Robohogs who wrote (6610)	6/22/2002 1:38:44 AM
From: Cary Salsberg	Read Replies (2) \| Respond to of 52153

I am not sure what I am wrong about. I certainly don't know about the science and the products, I have only been following this thread for 6 months, and I have NO position in biotechs, long or short, but my portfolio of "Emerging Biotechs", based on Peter's favorite 20 in December 2001, has gone from $76K to $31K (down 59%) and they seem less popular now than December. There certainly are a few major successes and profits can ONLY improve at many companies, but I see a majority of public companies that would still be venture capital supported if not for a former willingness of the market to support IPOs. Obviously, my contention that the falling prices are due to the markets increasing awareness of the perils of venture capital investing is just a hypothesis to characterize and explain what I have witnessed in the market place.