The Biotech Investor's Bible,   ISBN:9780471412793

Customer Rating: 

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.

Customer Rating: 

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.

Customer Rating: 

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.

Customer Rating: 

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.

Customer Rating: 

This was a difficult book for me to review. I bought it primarily because of the rave reviews on this web site. Overall, I'm glad I did. However, the book fell slightly short of the reviews, hence my 4 star rating. It contained a great deal of interesting and useful information but lacked organization and structure. In that sense, it was indeed a Bible, a collection of articles, rather than a text.

My primary complaint is that the first few chapters were practically devoid of content, offering only hype on how great biotech is. The comparison of biotechnology with the PC industry was also a bit of meaningless hype.

On the positive side, after the reader wades through or skips the first three chapters (unfortunately, I read them), there are numerous valuable bits of information and insight. Particularly valuable are the author's idea of categorizing biotech companies by market capitalization (share price times shares outstanding). This is a useful way of measuring how the market evaluates a company that has no current earnings. Chapters 10 through 15 are a veritable encyclopedia of the different approaches taken by biotech companies, from anti-sense to vaccines. The leading companies in each field are introduced and their prospects briefly reviewed. These chapters were readily useful to the investor and led me to make (so far) successful investments in PDLI and QLTI.

The book is now silghtly dated, having been published in 2001. However, this can be said of any two year old investment book. The reader should certainly do some careful analysis of the current state of any candidate for investment. I actually found the slightly dated nature useful in that it allowed my to judge which companies still looked like winners two years later and which did not.

Advice: Buy the book, skip the first three chapters, and read the rest. Also buy and read Investing in Biotech by David Harper which covers much of the same material in a more orderly manner. (More detail is available in my review of that book.)