Biotech Values

[mcbio]

Point being, I think you really have to be in earlier rather than later with a drug like this as the Street will start to project the share price to maturity if the drug really starts to look like a winner, and it will start to do so very quicly. After that all the returns, except for trading on steep troughs may be gone.

However, it is usually worthwhile to wait until you know the drug really works, and you know the drug works well. The problem in this case, once the durability evidence comes out the shares are likely to spike before one could start buying. VRTX gave a great opportunity to start buying very cheapl ased upon the fact that telaprevir worked very well, and you knew it. I don't know if EXEL will give us that chance to buy cheaply if you wait until durability data is makde known - which does create some issues if you want to minimize your risk factor. But who knows how it will come out in the end in regard to share price behavior.

I totally agree with waiting until you have some sign a drug works but not waiting until the full sign is there because at that point it may be too late. You always have to take into account the market cap, the evidence of activity, and the potential opportunity and weigh things of course. With EXEL, the question is whether or not the bone scans are sufficient evidence that the drug works. Or is it at least enough of a signal to enable EXEL to land a really lucrative partnership for XL184 again, which could boost the shares? Although I don't think we can answer the former with any certainty despite the encouraging signs, I think the latter is entirely possible and that's why I think I like EXEL's risk-reward at the present level.