Club Biomed &endash; Meeting Minutes &endash; June 19, 2002

The meeting began at 6:35 p.m. in E-415 (Pharmacology Library)

• Dr. Wagner kicked off the second meeting of Club Biomed by starting the "name game" again, this time asking each partner to state his/her name and identify what's important in evaluating a company. Some common responses included:
  • Technology
  • People (listed several times)
  • Balance Sheet
  • Innovation
  • Products
  • Sales
  • Infrastructure
  • "Burn Rate"
  • Market forces
  • Adaptability
  • Potential Profits
• While everyone introduced himself or herself, Carlos D. and Garrett D. collected contributions.
• Next, there was a call-to-order and the Minutes from Meeting 1 (5/15/02) were unanimously approved.
• John W. talked briefly about a preliminary list of biomedical companies that he compiled. He passed out the list of companies for discussion later in the meeting.
• Next, John W. discussed our plans for the first three years of Club Biomed. Specifically, he focused on our "Investment Philosophy" including the important issues of:
  • Risk
  • Transaction costs and taxes
  • What is our time horizon?
  • Holding/selling stocks
  • Evaluating a company
• John W. then presented Draft 1 of "Evaluating Stocks: the Club Biomed Way". In this, John outlined initial goals for the club for Years 1, 2 and 3. For Year 1, we would hope to have 2-3 stocks in our portfolio; 4-6 stocks in Year 2; and 7-10 stocks in Year 3. A prime mantra of Club Biomed is that we "hate taxes and hate transaction costs".
• The bulk of the meeting then consisted of comments by partners concerning Dr. Wagner's presentation on Evaluating Stocks. Comments were too numerous to list by individual, but several of the main points were:
• There is a tax advantage in holding a stock for more than 1 year
• Omar suggested that we develop a mechanism for unloading a failing stock &endash; i.e., how dynamic will our investment philosophy be? Dr. Wagner concurred the need to develop such a mechanism.
• It was suggested that we develop an algorithm for buying/selling based on volatility
• Dr. Wagner then shifted gears, and discussed what he believed would be an "ideal report" on potential companies in which to invest. Specifically, evaluations of companies should include:
  • Category and history of company
  • Existing products/patent positions/ability to extend product line and profits from them
  • Promised products and potential income. Scientific and discovery strategy? Where and how many are in the pipeline? Clinical trials? FDA approval? marketing strategy & competition
  • Size of market and competition in the market
  • Ability to market product
  • Financial analysis Profits and loss, promised profits, cash flow, financial position, balance sheet, potential liability problems
  • Quality of people (leadership, advisory board, scientists, clinicians, marketing)
  • Alliances and cooperative agreements
  • Impact of government policies on company success
• Dr. Wagner also mentioned that, following a partner presentation on a company, we would ideally have a vote on whether to buy, sell or continue tracking that company.
• Dr. Wagner next made a point that we need to archive the partner presentations on companies, so that we will have a long-term record of the Club's activities.
• Next, Dr. Wagner revisited his list of potential companies to track. With that, lively debate ensued concerning whether we should track individual companies, or rather "clusters" of companies based either on market segment (Big Pharma, Biotechs, Start-Ups, Generics), therapeutic indication (Cancer, Monoclonal Antibodies, etc.), or simply personal interest.
• We tentatively agreed on five major segments thus far, including:
  • Antibodies for cancer
  • Big Pharma
  • Generics
  • Big Biotech
  • Angiogenesis

• John W. finished off the meeting by reminding the partners of several online resources available to us, including:
  • Biospace.com (encouraging us to sign-up)
  • Recap.com (will send e-mail re: sign-up)
  • Reiterated the usefulness of Tightcircle

  A sign-up sheet for recap.com and Tightcircle were passed around the room.

• Partners then were able to sign-up for individual companies to track, as well as for one of the initial five "clusters" listed above. The clusters typically had 4-5 partners each. The list of partners that are focusing on these clusters or specific companies was subsequently posted on our web site. Go to http://www-users.med.cornell.edu/~jawagne/Biomedical_Science_Investm.html and click on 'Companies and Clusters being explored'.
• The final meeting item was a brief presentation by Carlos D. on the bookkeeping system of "units" used by Club Biomed. Carlos also, for one time only, made public a listing of partner contributions (money and units) to date. Carlos stated that this would not be normal practice. From the May 15, 2002 meeting, Club Biomed received approximately $3,400 in contributions by partners.
• Carlos also passed out slips with information on accessing Club Biomed's E*Trade account online (read-only).
• For the July 17, 2002 meeting, we are scheduled to see a presentation on ImClone, to be given by Bryan, Mona, Carlos and Andrea.
• The meeting was adjourned at approximately 8:10 p.m.

Graciously submitted by Club Biomed's Recording and Procedural Partner, Mr. Garrett DeYulia.