Replies to post #39658 on Biotech Values

[DewDiligence]

>Looking to diversify, and I would like to pose this question to the board: What sectors/investments are inversely correlated with the biotech/pharma sector?<

Over the long haul, I would imagine that the stocks of funeral-service providers and cemetery operators would qualify.

If drug/biotech stocks perform poorly, it’s apt to mean that profits are down and losses are up. This would imply less money plowed into R&D and fewer good drugs brought to market. In due course, fewer good drugs ought to mean that people die earlier, and that’s good for the funeral and cemetery companies.

[lumpy9200]

biophud,

While not inversely correlated to the biotech/pharma sector, companies that gain from success or failure in clinical trials are the companies that run the actual trials. I have recently taken an investment in Kendle (KNDL), the number 4 company in this field with designs on becoming the largest through aquisition. Kendle recently bought Charles River Labs.

A possible downside here would be when the company running the trial screws up AND the drug fails to meet the endpoints. NFLD got creamed yesterday, and from what I can gather Quintiles may have to take at least some of the blame for problems/errors with the trial.

I may be wrong on some of the above, and would gladly be corrected if so.

Best regards,
Geoff