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

To: Biomaven who wrote (19689)	4/9/2006 10:31:12 AM
From: Biotech Jim	Respond to of 52153

Ewolf and Peter, excellent questions and discussion. Under point 3, Peter, I would expand that to scientific and medical critical analysis, and experience base to not make the same mistakes over again, as well as to capitalize on previous successes that have occurred both within a company and in this sector in a more general sense. I suspect that you factor those issues into your overall judgement category. The one point that you strongly make, Peter, and that I strongly concur is that drug development is risky, and of course that is where a depth and breadth of pipeline comes into play as well as savvy financing. On a somewhat related note, I have my views on near term investing in the healthcare sector, and we are at a 5 year high on several general market indices. Due to the high correlation of individual stocks to the indices, we need to keep in mind the market tone for either holding or buying into stocks, especially the biotechs. Though there is a disdain for the charts on this thread, I have asked on another thread for people to provide their views on the macro picture and on sector outlooks. If any are interested, please see: Message 22340997 BJ

To: Biomaven who wrote (19689)	4/9/2006 1:44:14 PM
From: Arthur Radley	Read Replies (1) \| Respond to of 52153

Peter...very good observations!!! Sadly, I broke one of those rules by ignoring the events at DSCO...(Judging Management). For those who can gain access to the previous week's BusinessWeek, they have an interesting article...Biotech's-Boon or Bane? The articles points out that many are now turning to hedge funds for financing when they are unsuccessful going the traditional and normal VC route. A key they mention is that this always "has strings attached". Considering this issue I think that your point #5 should be considered throughly before one invests in a biotech firm.

To: Biomaven who wrote (19689)	4/9/2006 2:25:09 PM
From: Clarksterh	Read Replies (1) \| Respond to of 52153

There are a couple of different dimensions that you have to look at when judging management: Awesome topic. Aside from the fact that I agree completely that this is one of the the most important parameters in judging an investment, you have some interesting ideas on exactly where to look - e.g. inlicensing. I have at least one additional major category and one important subcategory: Major category - ability to hire, keep and effectively use good talent. (One of the best management books of the last decade has this as the most important attribute - albeit talked about in a somewhat different form). A primary metric for this is management turnover. Significant subcategory - One of the primary failings of small biotechs is to make poor decisions inre partnering. This doesn't fit cleanly into one of your categories since it is a conjoining of 'shareholder value', 'judgement' (do they really understand the difficulties of bringing something to market?) and 'good financial savvy'. Of course the primary problem with assessing management is that it is so hard to get good metrics. For instance, even in my favorite management team, CYPB, I can only make assessments in 2 or 3 of the categories - they set up excellent partnerships, they have very good judgement and are open (the CEO was very candid about the risks in the trials, and has more recently been totally open about being unable to be open about the details of the recent trial. -ng-) and they do not have excessive turnover of mgt. It would be interesting to see the favorite biotech management team of each of the regulars on this board. Clark

To: Biomaven who wrote (19689)	4/9/2006 2:52:04 PM
From: nigel bates	Respond to of 52153

Cool list. Re - 2 and 5, I have few shares in a UK stem cell minnow. Given that they have a market cap. of around $25m, and don't yet have a full listing on the London Stock Exchange, does this look a sensible way of raising further funds ? The US angle looks hubristic and potentially expensive (Sarbanes...) to me, but I'd appreciate another perspective - Guildford, UK, 5 April 2006 - ReNeuron Group plc (AIM: RENE) announces that it proposes to raise up to £8.5 million (under $15m) via a non pre-emptive placing of new ordinary shares and American Depositary Shares (ADSs) (the 'Placing'). The Company intends that institutional investors (including US and certain existing institutional shareholders) will participate in the Placing. The proceeds of the Placing will be used to fund the Company's lead ReN001 programme for stroke as it progresses to the clinic, and also to fund the Company's other therapeutic programmes based on recently announced progress made. The Directors believe that the Placing will enable ReNeuron to widen its US shareholder base and enhance the Company's profile in the US, where much of the Company's activities concerning its lead ReN001 stroke programme are currently focussed. The Directors further believe that an enhanced profile in the US market will provide greater liquidity in the Company's shares and serve to increase the overall value of the Company in the medium to longer term, to the benefit of all shareholders. To this end, the Directors intend to consider listing the Company's shares in the US in due course, subject to market conditions, the ability of the Company to meet applicable listing requirements and the Directors then judging that such a listing is in the best interests of the Company and its shareholders as a whole....

To: Biomaven who wrote (19689)	4/11/2006 3:08:32 AM
From: DewDiligence_on_SI	Read Replies (1) \| Respond to of 52153

Judgement - do they make good decisions? In-licenses are the clearest metric here… I nominate FRX as one of the best (if not the best) in-licensors for their size. Celexa, Lexapro, Namenda, and Benicar were all value-enhancing deals. Willingness to cut a program that is marginal is another good thing to look at.< FRX has done this too, on more than one occasion. The most recent case was Combunox. p.s. Judgment has only one “e”. I couldn’t resist after you pointed out the extra “o” in someone’s “loose” :-)