Sep. 12, 2003 | ||||||
BioFact: |
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Now what? The momentum investors are at your door!Lorraine Ruff, David Gabrilska, partners;
Scott Sipes, associate Biotechnology year-end stock price comparisons with 1998 year-end are at best a momentary diversion. Of the 12 Pacific Northwest regional biotechnology NASDAQ companies, seven of the 12 posted percent gains in the upper two and three digits. Most regional life sciences stocks enjoyed the fourth quarter technology up tick as a result of momentum investors who were looking for relatively undiscovered bargain priced stocks. What took the momentum traders into the biotechnology sector?
As reported in our Chase Hambrecht & Quist coverage, theres a high probability that investors may be reacting to the herd mentality and investing based on hope, hype and glitz. News media coverage - financial and health drove momentum investors into life sciences stocks. Its clear they will ride the stock up and take profits quickly if they perceive no reason to stay put. Among the momentum investors, however, are the monied altruistic investors baby boomers who have had their first touch with middle-aged disease and disorders and reason to believe the drug products of the biotechnology revolution will provide cures to scourges that could take their toll in the near- and longer-term: Alzheimers, cancer, diabetes, heart and lung disease. The altruistic baby boomers have a lot of time to sweat the details, do their research and make sound investment judgments. It is this demographic that biotechnology companies and particularly Pacific Northwest regional life sciences should focus. When you take a look at regional life science companies and their positioning strategies, they may be missing the fundamentals, sometimes by miles. If they were to refocus on the altruistic baby-boomer, some very positive payoffs could ensue. What if companies communicated their
It occurs to us that it will not be sufficient for regional companies to merely ride the momentum wave. It requires companies to think of themselves not as regional players but as sector players who need to market their science as much as their product applications before the investors show up at the companys front door, curiosity intact, money in hand. |
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