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An Important Time For Biotechs


...timeline performance is about the only way to judge these companies


February is always crazy for us as the companies we cover start holding their YE-2005 conference calls. This is the time in biotech when companies often reset their expectations for timelines, so it's an important time. As I've noted before, timeline performance is about the only way to judge these companies.

A few thoughts from a scatter-brained week…

  • While Pfizer's (PFE) analyst day was technically last week, the impacts have bled into this week. Lots of queries on exactly what we heard concerning Pfizer's inlicensing and acquisition plans. To recap, Pfizer will inlicense a product 2H-2006 that either has a NDA in at the FDA or will file one this year. Inlicense, not acquire. Acquisitions will likely be companies at a little earlier stage.

  • I was a guest speaker on Wednesday to an investments class at the University of Washington – Bothell campus. My task? Debunking the efficient market hypothesis. I rambled on for an hour, as requested. I couldn't help but think perhaps I should have kept my EMH comments to about 10 minutes (EMH is so obviously wrong, why go on and on about it) and just opened the floor to any questions about the market. I go back twice next quarter, so I'll likely switch things around a little.

  • Speaking of UWB, I co-teach an Entrepreneur's workshop there. 35 students, 13 surprisingly good business ideas this time. If you want to hang out with a few of these bright kids, more than a few of the great people who populate the entrepreneur's network that surrounds this class, myself, and Minyanville's Todd Harrison check out or drop me a line. Registration is a cheap $80 if you do it before the end of the month.

  • Both the AMEX Biotech Index (BTK) and the NASDAQ Biotech Index (NBI) broke a series of lower lows and lower highs yesterday. That negative pattern is still present in the BBH (the ETF for the BTK), so take care if you swim in the large cap end of the biotech pool.

  • Unless you read the NY Post closely, you probably missed it. The AGs of Connecticut and Utah filed subpoenas against the DTCC for information on naked shorting. Pros on Wall Street seem to take particular delight in dismissing this issue – and any issue surrounding short selling – as the whines of people who lost money. I think that's a serious mistake. Reg. SHO is a complete joke and I suspect a bright light on the innards of the DTCC will surprise even jaded folks inside our industry. While I think the accuracy of this survey is limited, you can bet it will be thrown in the face of those with political aspirations in this election year.

  • "Pitchers and catchers reported to Spring Training today…" Eight sweet words, full of possibility and promise. I think Bull Durham goes in the machine this weekend for sure.

  • Do you currently invest in Eastern European emerging markets? Do you have the time and inclination to help out a student entrepreneur by taking 15-20 minutes to answer some questions about research on companies in that area? Please drop me a line at

  • My ticker screen is roughly organized by market cap, with the larger cap names towards the top. The strong trend in biotech over the last two weeks is middling performance of everything towards the top and really strong performance for everything on the bottom. This is reflected in the calls I'm getting. Lots of questions about tiny companies most people have never heard of. Few questions about the larger ones everyone has heard of.

  • Never kick yourself for taking a 55% profit even if the stock keeps going. They don't grow on trees, even in our corner of the forest.

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No positions in stocks mentioned.

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