Biotech Valuation Message Board

To: Johnny Canuck who wrote (17285)	7/12/2005 12:34:09 AM
From: Biomaven	of 40319

Harry, Well the first thing you have to get used to is that everything takes a very, very long time. From Phase I to approved drug is typically at very least 5 years. Reduced burn rate is not a relevant metric at all - in fact as drugs progress, burn rate will increase because trials get more expensive. Validation comes from successful trials followed by progression to later stage trials and by partnerships, although the latter are a mixed blessing - the company gives up some of the upside. When I look at a company with an early stage drug, my reaction is as much one of personal taste as anything else. If the drug is successful, what will its probable sales be like? What will the competitive landscape look like by the time it might be approved? Are a dozen other companies all chasing the same target? What are the potential safety risks relative to the need the drug services? Is the target well validated? How big are the trials going to need to be to gain approval? And how much will the trials cost compared with how much money the company has now? There are other genomics companies that have made the switch to drug development using the cash they garnered in the bubble. Of these I happen to own INCY, because I respect their drug development efforts. Peter