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

To: scaram(o)uche who wrote (163)	4/13/1999 10:38:00 AM
From: LLCF	Read Replies (1) \| Respond to of 52153

<flattening out the valuation curve until the very end, where it grows very steeply.> < do you bet that this situation will perpetuate, or that sanity will return to valuations for patents and pipes?> Yes interesting... this [don't buy until approaved/profitable] type of approach would create opportunity at this "dislocation point". So subjects approaching this point are way too cheap, especially if they are ALL treated the same. My "twisted" comment reflected my thinking that it is self evident that a % of "patents and pipes" [catapillers] turn into butterflys. Maybe buy catapillers and play options on butterflys??? And how does all this fit with the fact that lots of these stocks have acted terribly apon boardering on profitability? Almost like there's a "kink" in the curve! DAK

To: scaram(o)uche who wrote (163)	4/13/1999 10:53:00 AM
From: Biomaven	Read Replies (1) \| Respond to of 52153

However, this is not consistent with historical pricing in the sector, so..... do you bet that this situation will perpetuate, or that sanity will return to valuations for patents and pipes? Remember that part of the inconsistency stems from the overall change in relative valuations between all small caps and the big caps (not just biotech) that has developed over the last decade. People have been saying for years that this gap has to close sometime... People have also learned that biobucks aren't usually real dollars; and have been unpleasantly reminded many times just how risky any one drug candidate is and just how risky financial life is for undercapitalized small biotechs. PGNS really set things back as well, emphasizing that even a product with real sales isn't immune from risk. What could change things in the short term? Only some acquisitions or maybe an overall renaissance of small caps. Doesn't mean you can't make money in selected third tiers - just that it is likely to be slow and uncertain. OSIP has doubled in the last month on no announced news - but why this month rather than three months ago or next month I have no idea. Makes for rather uncertain investing. Peter