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Biotech / Medical : Gilead Science (GILD) Followers -- Ignore unavailable to you. Want to Upgrade?

To: saadi taher who wrote (560)	9/23/1998 12:38:00 AM
From: scaram(o)uche	Read Replies (1) \| Respond to of 961

Yah, Dudes and Dudettes, I expect it to hit $2,300/share by Halloween, and my broker says that they're working on a cure for long pregnancies, accelerating them to nine weeks instead of nine months. Anybody know if it's phase II or phase III? Saadi.... what did Lana say, last time you talked with her?

To: saadi taher who wrote (560)	9/24/1998 6:58:00 PM
From: Anthony Wong	Read Replies (2) \| Respond to of 961

Betting on biotechs By CBS MarketWatch Last Update: 6:18 PM ET Sep 24, 1998 SAN FRANCISCO (CBS.MW) -- It's not the easiest way to make a dollar -- and certainly not the safest -- but investing in biotechnology can pay off handsomely. CBS MarketWatch.com asked Tim Wilson, an analyst at SG Cowen, for advice on how to play the sector. Reporter Brenon Daly talked to Wilson at a San Francisco conference where biotech companies are making presentations this week. Following are excerpts from their conversation: What do you tell investors thinking of dabbling in the biotech sector? Tim Wilson: First, you've got to go into the sector with your eyes open to all the risks. I think most people are aware that this is a deeply risky industry. The inverse of risk, of course, is reward. So if a drug does make it all the way through from early clinical trials to market -- which is just a 10 percent chance -- then at the other end you should have something that is very economically valuable, and therefore, a great stock on your hands. The problem with that, though, is that it is a 7-to-10 year process, and we're interested in making money in a shorter period than that. So what you got to do as an analyst or investor is find the good companies -- judge the science, judge the quality of their clinical trial program, judge the quality of management, and look at the balance sheet and if they have the appropriate partnerships with the major pharmaceutical companies, and (finally) are they in an area that needs these types of drugs? If investor get good answers on those questions, they should consider purchasing the stock. Keep in mind that 90 percent of these companies are loss-making, so there's no quarterly reports that mean anything. You need to buy these stocks before important data comes out. One classic technique on a sort of trading level is to buy the stock going into a medical meeting where there'll be good data -- or where you think there'll be good good data coming out. Given that it is a long process, are there ways to insulate against the risks? Tim Wilson: Well, there some diseases that are more amenable to cure or successful therapy than others. For example, for HIV, we have 13 products on the market. Although we are a long way from curing this disease there are effective therapies. They need to be improved in terms of convenience and side-effects, but we're kind of there. We know the clinical trials should look like and we know the FDA will approve anything that looks even half interesting. We know what the issues are in this sector. But if you go to something like stroke or Alzheimer's disease, you're almost completely in the dark. A number of technology analysts recommend buying shares of a number of innovative companies in a sector and then consolidating the bet on the winning company as it emerges. Does that approach work in biotech? Tim Wilson: Not in such a literal sense. You certainly need a portfolio strategy in biotech because unless you're God you can't predict how a particular molecule will work in man. A pharmaceutical is interacting with a natural system, unlike, say a software program or chip that is entirely man-made. So you need a portfolio. It's rather like later-stage venture capital where you buy a basket of stocks, say 5 or 10 -- 1 or 2 are homeruns, 3 or 4 you kind of wash your face with them and then you're going to have some blow-ups. You must expect blow-up in this industry because the laws of drug development are that 10 percent make it from clinical trials to market. That's 90 percent failure. So, what are the home runs in your view? Tim Wilson: My No. 1 pick is BioChem Pharma (BCHE), which developed the world's No. 1 AIDS drug. We also like Genset (GENXY), Centocor (CNTO), Gensym (GNSM), Gilead (GILD).