To: Biomaven who wrote (7747 ) 1/16/2003 11:33:25 PM From: RCMac Read Replies (1) | Respond to Peter,Message 16049915 But of course the wondrous thing about biotech investing is that this long time period doesn't correspond to heightened risk in the same way it does for high-tech companies. This is where the naive DCF analyses break down for biotech. It's sort of like building a skyscraper - it's hard, it's expensive and it takes a long time, but very likely you'll have a building about when you said you would. Now drug development (even of an ICE) is always going to be much riskier than building a skyscraper, but particularly if you look at projects en masse the same principles apply. (So perhaps a better example than a SEPR ICE is to look at say MEDX or ABGX's portfolio of Mab projects - they'll take quite a while to prove themselves, but ultimately a substantial number will work).on the pharmaceutical side, you have a pretty good idea what else is going to be on the market when you are. Drugs don't simply appear from nowhere. But unlike real estate, demand is pretty predictable. We have a pretty good idea of how many people will have a particular disease. Insurance/government reimbursement is indeed a new uncertainty here but all historical indications are that if you get a good drug on the market for a big indication you will do very well.
