Biotech Values

[wallstarb]

I'm not saying you can't make money overpaying for a good science or technology - the point I'm making is that good science/technology alone doesn't make for a good investment.

And with biotech - don't kid yourself - the ebb and flow of stock price is all "hope and dreams" and "perception" of future potential. As the possibilty of success increases the value assigned to the company goes upward and vice versa. The you have to add in the "hype" factor of the current climate - biotechs ride the ebb and flow of investor sentiment - they go in and out of favor - and the valuations as a group rise and fall - just as some sectors go in and out of favor - as recently witnessed by the recent 6 month "stem cell euphoria"

To ignore investor and market sentiment - and only focus of the science is a great way to go broke pretty quickly.

Now to reply to your statement about companies with phase 3 products - when DNDN was waiting for their first FDA panel result it was $15 - $20 a share. and it sported a market cap of $1.5 billion. Being cash rich or poor has nothing to do with the valuation put on the IP. The increase at that time from a $300m market cap to nearly $2 billion has all to do with perception and the buzz. My point is that it had the same science @ $3 that it had @ $20 - so what changed? It was perception and "hope" and "expectations" - sometimes those expectations are under valued - sometimes way overvalued.

If you disagree with this then perhaps investing isn't your game and perhaps you should look at going into applied science rather then investing. For me it's not about the science - it's about the investment - the only reason I invest is to make our funds and myself money. If you really want to make a difference and cure aids/cancer - take some of the profits and donate to the MDA or some cancer insitute that funds preclinical research.