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

To: Biomaven who wrote (8735)	6/22/2003 3:20:41 PM
From: Icebrg	Read Replies (1) \| Respond to of 52153

Peter >>I'd like to make some room at the bottom for some true biotechs like KOSN.>> No problems. We will do as they do in Tour de France. Reserve some of the bottom slots for local favorites. Just let me know which one you want included and I will take away the corresponding number of entries at the bottom. I would rather keep the number at 100. In order not to make it too labour-intensive. >>The biotech/pharma distinction is always troubling.>> Yes, it is difficult these days to tell who is what and why. The way I have treated this here is to include all biotechs and added some aspiring small molecule developers. Pharmas in my book are companies who are already past the drug development phase and for whom the sales and marketing operations are the defining characteristics. (If they need a specific drug they can always buy it, if they don't manage to develop it on their own). >>I'm a little confused by your classification.>> To tell you the truth - so am I. We are still developing without having the goal completely defined yet. I started out by thinking it would be nice if it would be possible to show and follow in figures the biotech sector's march towards profitability. And I decided to use the components in the NBI-index as a proxy for the whole sector. I did realise more or less immediately that Amgen would be too heavy in such a calculation. They would swamp out most of the others. So they had to be taken out. Perhaps Genentech belong there too. They will become huge once Avastin and Tarceva have been approved. Not that they are small now. Having got rid of those two brings the question: What about the rest? I think any effort to analyse the results would benefit from a further classification. The main categories could then be: - already profitable. - about to turn the corner. - no profitability in sight. I might have cut a little bit too short by declaring the 100 mUSD cut. It is always good to have a well defined base for the classification. But if some of the companies end up in the wrong place (like Millennium did) it will not help. So rather than to have a revenue-based classification, one might use the companies profitability status. I.e. something like companies who have been profitable for more than 2 year belong to the next best category and those with one year of profitability and those who will reach profitability based on already approved drugs will go to the third class. I would put SEPR there though, but not the likes of NBIX or ICOS. We might have to split the struggling group into major strugglers and minor strugglers. In the major group I would place those which are close to product approval and promotion to the next group. To make things easier I would still like to use a market cap for this cut-off. Say something like above or below 500 mUSD. The main purpose with this classification is of course to present data in such a way that further analysis is made easier. Let me have your views. I will by the way redo the spreadsheet now, when I know better what we want. I will make one sheet per company. I used to have one sheet per reporting period. By having one company per sheet we will gain a lot of flexibility. Such as gaining a possibility of grooving the whole thing. Erik PS Not that I absolutely need it, but it would be nice to test out Groove on a project of this type. I will make an announcement on the Biotech Information sources board and see if it is possible to turn this into a collaborative effort. The chances of both survival and development would be improved under such a scheme. Subject 54021,