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

To: scaram(o)uche who wrote (10641)	2/27/2004 2:48:13 AM
From: JMarcus	Respond to of 52153

Glad you enjoyed my scrivener's notes, Rick. Your friend Lissa also had some interesting comments in her informedinvestors.com presentation. I took a few notes from her talk as well:  Even after the pull-back of the last couple weeks, the biotech sector is still up 9% year-to-date.  Biotech stocks used to move in tandem with the semiconductor sector, but not any more. The two sectors have finally decoupled.  10 years ago just 10 biotech companies had approved products. Today there are 60.  IMCL is still a topic of discussion. The IMCL anchor dragged biotech down further than it might have gone otherwise following the bubble burst of 3/00. IMCL wias biotech’s own little Enron. But unlike Enron, IMCL has turned itself around!  $2.6 Trillion/yr is spent on health care. The rate of increase is in health care spending is twice the GDP Growth Rate.  Prescription drugs are the most cost effective way to treat most diseases. Yes, non-generic drugs are expensive. But even at their high prices, they are cost-effective.  Medication costs jumped 15% in 2002.  McClellan’s move from FDA to CMS will likely give him even more impact upon policy. He is very focused on making gov’t more responsive to industry.  FDA needs to focus more on safety than efficacy. Otherwise, drugs that may really help a small segment of the population will never reach the market.  Personalized medicine will heavily impact how you get treated in the future. On average, SNP differences between individuals account for 3X to 4X. differential in propensity to contract related diseases.  Prescription drugs were 10% of healthcare costs in 2002, but individuals pay a higher portion of that cost than they do of the rest of their healthcare costs.  Life Sciences received about $5B in VC funding in 2003. That amounted to about 25% of all VC investing in 2003. That is the highest percentage of VC investing being allocated to biotech in the last 5 years. In 2003, biotech was second only to software in VC funding.  14 of the 68 IPOs in 2003 were biotech/medical. Those 14 biotech IPO companies of 2003 performed poorly for the most part. A few, however, have recently returned to attractive valuations.  Boston is heavily wooing biotech co’s to move from California to Boston.  STEM recently said that in 2005 they hope to be the first company to implant stem cells in Parkinson’s patients.  Lissa remains uncertain whether biotech sector will rise this year, but she is encourage that the sector has held up pretty well during the current sell-off. The McClellan move from FDA to CMS hurts. Uncertainty at FDA is never good for biotechs.  Drug reimportation has become a huge issue. Drug prices are going to have to come down because there is so much political pressure on Congress. That will hurt the biotech sector.  US is only country in the word that allows direct-to-consumer advertising of drugs. Marc the scrivener