Biotech Values

[wallstarb]

If a small biotech has a good drug and it's a hot commodity - big pharma can move quickly if they know there's a reason to. If there's no real interest outside of a single pharma then I would agree they can drag their feet and they have the luxury of time and move leverage over any terms.

The latter seems to be the case if a deal is still in the works for ARYX - perhaps the bad trial data in July gave the pharma some additional leverage - who knows. But the trial data did put ARYX in a weaker positon.

This is a prime example where you had a lot of eyeballs on a particular stock expecting so positve news - and how in these circumstances its a hard bet. The easier bet is to find the names where no one is expecting much of anything. IDIX was in that postion 3 years ago when the stock was $2.00 tradign under cash and they released that data at the JP Morgan conference (I think it was in Feb 2008) - Everyone had written that program off and the stock did nothing but go up for nearly 8 months. At which poitn EVERYONE was watchign and expectign good things - too many eyeballs, and once they disapointed it's done nothing but slowly decline (maybe its near the other end of the spectrum now and is under followed)

Sometimes you need people to just stop caring and write off a company for there to be significant upside potential, atleast that's what I look for.