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Subject:  Re: On Biotechs & Gorillas Date:  2/27/2000  10:20 AM
Author:  FoolishRainbow Number:  1182 of 8788

Gorilla Friends,

friend SlyAce,

I would enjoy anyone's thoughts to the contrary

Okay, you'll get some of my layman, uninformed but considered thoughts. This is in good faith and I would appreciate your response.

Biotech and gorilla game:

Very hard to consider as a gorilla game because biotechs are so unpredictable. Some high dollar stocks are riding on only one compound (this is what the biotech guys call this stuff). Unpredictability comes from many fronts.
1/ One can have very considerable $$$ invested in a compound and gets it into phase 3, this takes years in itself, only to have a patient die, sorry, and even not from the treatment...but....stock tanks big time.
2/ FDA has a bad hair day...stock tanks.
3/ The compound is effective, it works, but not enough to supplant the currnet space holder...stock tanks.
4/ Somebody sues, completely fraud suit...but...stock tanks.
5/ One has the latest and greatest drug and on the road to record sales, a rumor arises about a better drug from a start up...stock tanks.
6/ Some terrorist stuffs a bottle with some not so good compound...this has happened, remember tylonol? Leading stock tanks big time.

So many things can happen, its no wonder why one cannot trade a "system" of biotechs.

However, I have bought some biotech, not such a smart guy, but only with spec funds. Only small positoins. Not investment funds.

Research and find the medical/bio area that you feel comfortable about. Look at the focus and method of the compounds attack and think if it sounds reasonable. Learn about the biology.!! See if the target population is big enough to generate big revenues. Does the research firm have a sponsor, big time drug money companies? Is the company betting the house on one avenue or are there multiple areas of research? Put your money down and be prepared to wait for years.
Returns can be very high, but risks and wait times are also very high.

Hi-Tech gorilla games are much more predictable and are not subject to as many wild cards as biotechs.

Just my humble O.



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