Customer Reviews

The Biotech Investor's Bible

5 star:		(19)
4 star:		(3)
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2 star:		(1)
1 star:		(1)

 

 

At last a book that makes some sense of the biotech sector! The author, George Wolff has a very straightforward approach, starting with the big picture of the industry's development and then getting down to specifics about market behavior such as the reasons for the sector's incredible volatility. Wolff's analysis involves breaking the sector down in Four Tiers. Each behaves somewhat differently with the lowest Tier being both the riskiest and the cheapest to buy into. Tier One encompasses the well-known majors such as Amgen, which are relatively safe but less exciting plays. I think Wolff has set out a framework of understanding that allows investors to discriminate among the companies to find a reasonable balance of growth potential and security. Most of the book is strictly about investment analysis but the second part of it (Book 2) tries to decode the scientific background. I like his analogy, comparing the workings of DNA and cellular machinery to the innards of a computer. It's a clear enough explanation to convince me that I finally understand this abstract stuff. All in all, a good, illuminating read for people like me who are interested in the industry and where it's going. The investment advice is sensible and has a reasonable tone....not a "get rich quick book." I know there's another book on the market that looks strictly at the medical side of the biotech business. I like the fact the Wolff has gone beyond that to look at the ways the industry can affect a lot of other major sectors such as energy, chemicals, textiles and so on. Wolff believes biotech is going to become the biggest industry in the world and now that I see where the industry is headed, I think he's right.

I highly recommend this important book! You would have to be living under a rock to have not heard about the great advances made recently in genetics and biotechnology. The potential for a cure to cancer, the ability to fix previously incurable diseases, and many other medical advancements are becoming closer to reality because of biotechnology. But where could an investor go to educate himself on the many issues facing this industry? Nowhere. Until now. Investors who can sort through the myriad of scientific, corporate and government issues relating to this industry will be have a great advantage over the rest of us. George Wolff's highly readable primer gives its readers this advantage.

As an investment advisor, I know the great potential of biotech. All you need to do is look at the multi-hundred billion dollar market capitalization of the Mercks and Pfizers to know that success in drug development holds the key to untold riches. But which companies will get there? How do you as an investor approach this very complex field?

George Wolff's Biotech Investor's Bible thoughtfully lays out the key issues an investor must be familiar with. Product pipelines, alliances with major drug companies, strategies companies use to speed up FDA trials, valuation techniques, and a myriad of other important issues are thoroughly explained by Wolff in plain English.

A huge run-up in biotech stock prices in early 2000 was sparked by the expectation that the human genome would be mapped. The bubble burst in March 2000, leaving many of the hottest stocks broken and battered. The theoretical excitement however, has given way now to a market that is focused on the companies that have an aggregate of several hundred drugs in various stages of FDA trials. Many of these stocks have recovered and in some cases gone on to new highs. Wolff provides not only the overview of the industry you need, but also the means to determine which individual companies show the greatest promise.

Without this book and its comprehensive explanation of biotech investing, I would never attempt to participate in this market. But you should ask yourself: can you afford not to? With the tech sector in a shambles, with the stock market stagnating in general, what will bring on the next high-growth trend? A strong case for biotech is made by the author. The fast pace of research, the growing base of scientific knowledge in the field, and the several current winners like Amgen which sports a $65 billion market capitalization, all clearly point to the future development of many new, effective treatments which will be brought forth at an ever-increasing rate for decades to come. I for one plan to stay informed and involved with my investment dollars.

You truly would omit this book from your reading list at your own financial peril.

Like most people, I have read with interest many of the articles written in the last year about new biotech medical breakthrus, human genome project updates and the wild stock market performance of so many of these dynamic companies -- read, but not really understood. I was even tempted to invest in these cutting-edge technologies, but had no idea where to begin to research this specialized field. Until now... The Biotech Investor's Bible was a surprisingly easy and compelling read and loaded with an amazing amount of useful research material and background information. As a non-scientist, I was relieved by how clearly and even entertainingly Mr. Wolff writes about these companies and about the investment process. His enthusiasm is contagious. I found the "8 questions to ask yourself before investing" and the extensive information on how to use the internet to do research on this sector especially helpful. Understanding the difference in the three phases of clinical trials and how and where the results are reported is not only useful information for anyone evaluating investment opportunities, but for anyone wanting to keep abreast of promising new medical treatments. The first half of the book focuses on investment opportunites in this field of the future and the second half more on the science behind the headlines and the biotech companies. To my surprise, while I didn't fully understand everything about the science, I couldn't put the book down. I'm confident I now know more about this field than my financial advisor and look forward to applying what I've learned to diversify my stock portfolio.

Wolff's seminal work is a treasure trove of information for the serious biotech investor. It is also a full-fledge reference for continuing study in the science that underlies the industry. Wolff adroitly circumvents the profusion of hype that currently engulfs much of the discussion of biotech investing today. Where so many so called biotech experts seem determined to enflame the irrational exuberance that has plagued this industry in the past, Wolff chooses instead to lead the interested investor to concrete data and careful analysis.

As an investor disicnlined to throw money at chic trends, I benifited greatly from his meticulous segmentation of the biotech market. Such an approach allows for a clear and distinct understanding of the risks involved. His keen eye on the importance of diversification spoke to my conservative tendecies, while his analysis of particular bitoech companies provided the necessary confidence to make plays in this volitile areana.

Wolff's decision to separate the work between biotech investing and biotech science was critical to its success as an enduring reference. One can get the financial information one needs now within the first section; deeper scientific understanding of the industry can be developed gradually, by returning to the second section to continue one's education.

I recommend this work highly and without qualification.

There is not good book on biotech investing. The Biotech Investor's Bible is poorly written and badly organized. I find the same companies provided as examples again and again. Some of them no longer exist! The risk of this industry was not sufficiently highlighted.

The author groups companies based on market capitalization; I believe that this approach is fundamentally flawed. It runs the risk of feeding right into a mania.

I would like to have seen more comment on the stalwart biotech companies.

I did not learn much from this book. Perhaps that is the point. This area is a challenge.

Successful investing is difficult. Investing in biotech companies can be even more challenging. I did not find this book up to the challenge.
The organization of the book was confusing: the author jumped around from topic to topic. The discussion of the science was fine, but there was not really anything that I could not find from a five minute web search.
I believe if I had calibrated my expectations differently, I may have found value in this text. The example companies are dated. I believe one of them at least no longer exists. Some of the companies classified as biotech companies are really baby pharmaceutical companies.
The tiered approach to differentiating among companies was interesting. It did not clarify for me how I should approach an investment.
The writing style is good, in fact, I found the book easy to read. I have to be blunt, the content was very disappointing.
I do have to remember that when it comes to biotech investing, we're at the crossroads of two difficult activities. I did not find that this book clarified either.

Kudos to George Wolff for not dumbing down biotech. The Biotech Investor's Bible is a serious work for those serious about making money. One does not have to read the last third on the science of biotechnology, but I would highly recommend studying the first two-thirds on investing very closely. While complex, Wolff's theories on evaluating companies are well thought out and demonstrate a great deal of research that would be beyond the abilities of most investors. One can, however, parlay that knowledge into building a portfolio in what will surely become the world's biggest industry.

Biotech investors may be able too realize profits by recognizing the Biotech sector is an industry that will take several decades to mature. Biotech has taken two decades of research for the first wave of products to start hitting the market. In 2000, biotech had 30,000 patients submitted more than all the years combined of 16,000 patients total. Individual investors have the opportunity to own some of tomorrow's giants, if they take a position early and wait as the market gyrates and finally recognizes a great emerging giant.

Biotech is a small market niche and the growth potential is strong and investors provide the capital for growth and expansion in this sector. Investors have shifted investment strategies away from research information collection investment too product oriented investment. One expert estimates the cost to bring a drug to market at $1.5 billion and 15 years of research and development effort.

The author segments the Biotech sector into four tiers: Tier 1 - biotech companies generating a substantial revenue flow and usually having high PE ratios suggesting high investor expectations for results and offer greater reliability because of their revenue flow: Amgen created Epogen, a drug that cause blood regeneration yielding profits of over a billion dollars a year and Biogen created three interferon drugs for (Hepatitis C, Cancer and MS); Tier 2 - biotech companies representing a long term growth investment. These types of biotech companies have strong developed research capabilities, a strong drug pipeline, a good array of partners and alliances, royalty revenue, and greater prospects than Tier 1; Tier 3- biotech companies with a promising product line, market capitalization greater than $800 million, in danger of severe loss on product failure or FDA rejection, position for great gains if FDA approved, and represent the major of investment opportunity; Tier 4 - biotech companies that are inexpensive to position in, these are the great bargains and they are characterized as having market capitalization below $800 millions with low trade volume and risks of liquidity shortages.

Tier 2 companies are attractive because they have products on the market and these products usually take one to two years to realize a gain. Biotech survival depends on having getting more drugs to the trial stage, thus, increasing the likelihood of a profit. Second creating drugs or therapies focused on treating serious or untreatable diseases. Third arranging alliances and partnerships too reduce risk and provide market and development capital. And fourth shorten times for FDA approval.

The author recommends keeping an eye out for simple and inexpensive ways to combat disease. The author warns that biotech is very volatile characterized often with swings reaching between 10 to 30 percent in a day, furthermore, hedges against the risk of loss where gains could be 20-30 percent if FDA approved and 70 percent if reject. The market will not tolerate failure and has punished numerous companies when a product has an adverse effect on a consumer.

The author also points out that often the market will react positively on news driving the price up but sell off in the following months but often the long term pattern demonstrates a positive price acceleration. The author uses a 50 and 200 day moving average to gauge price direction and encourages investors to buy the company not the price. The Biotech sector Beta is effect by the market trends and price can move counter to breakthrough news if the market is moving against price.

BioChips: Affymetrix the leader in "bio chip" technology using a process called hybridization uses a solution containing genetic material bathes the bio chip; the bio chip has tubes contain DNA material for which some of the genes from the genetic solution will attach to or hybridize the tiny probes on the chip; and when scanned by laser, these hybridized probes will glow and will be detected by the computer. The author suggests that the bio chip can not discover all diseases instead it will probably work like this: a physican will have too analyze the patients condition and select a gene probe array that have been designed to look for problems in that particular area of suspected diagnosis.

Genomics: Celera, Geonome Therapeutics, Human Genome Sciences, Hyseq, Incyte Pharmaceuticals, Millenium Pharmaceuticals, Orchid Biosciences, Sequenom, Variagenix, Diversa, Gene Logic, Cura Gen, Myraid Genetics, and Maxygen.

Proteomic Analysis: Celera, Ciphergen Biosystems, Genomic Solutions, Large Scale Biology, Cytogen, and Myraid Genetics.

Monoclonial Antibodies: 70 percent are in clinical trials. Antibodies are proteins with a purpose. The B cell creates an epitome or a mold from the antigens of the foreign bodies. The epitome is used to identify the cell type to attack. The B cell produces the antibodies that attach to the antigens of the foreign cell. The B cell can create only one type o antibody and clone many copies of this strain.

Monoclonial Antibodies: Abgenix, Coulter, Imclone, Immunomedics, Medarex, Neorx, Medimmune, IDEC Pharaceuticals, Immunogen, Gliatech, AVI biopharma, ICOS, Protein Design Labs, and Cytogen

Protein Therapies: Lilly, Genetech, Amgen, Biogen, Cytogen, and Myriad

New Vaccines: Aphton, Chiron, Vical, AVAX, Biomira, Epimmune, Neurocrine Biosciences, Corix, Geron, Cytogen, Aviron, Trimeris, Genzyme, and Vaxgen

Growth Factor: Amgen, Regeneron, Curis, American Biogenetic, Gullford
Tissue Replacement: Regen Phrama, and Regeneration Technologies.

Wolff has written an excellent book on the biotechnology sector. He has combined great journalism skills to explain to us technicalities like "naked DNA", clinical trials, targets, genes sequencing etc.

In addition to his journalism ability, he has given us a good feel of the 200 companies in the biotechnology sector. He has divided the sector into 4 type of companies that investors can relate with their risk and return profile.

Do not expect to pick biotechnology stock winners with this book, as he has forewarned that biotechnology investing has an extremely long time horizon and fraud with risks like product failure, etc. He has also elaborated on how to read announcements by biotechnology companies that could enhance the potential of a product.

With this book, I had a very good feel and knowledge of the sector. Overall, a good start for investors to begin with.

As the title of the book suggested, Wolff ambitiously aimed to write a 'bible' for biotech investors. His ambitious effort fell short. I find the content of the book quite uneven: the scientific background chapters are relatively well written, but some of the computer analogy seems redundant & distracting; the investment perspective chapters are slightly disappointing, as I do not see the merit of categorizing biotech firms based on market capitalization, & the case studies can be more systematically organized to better illustrate the underlying arguments.
Given the highly complicated nature of the biotech industry, I can imagine it is challenging, if not impossible, for any author to write a 'bible' for biotech investors. Especially, when biotech is a hardcore science, while investment can be considered as an art rather than a science.