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:
- People (listed several times)
- Balance Sheet
- "Burn Rate"
- Market forces
- 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:
- 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
- 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
- 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 &
- 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
- Quality of people (leadership, advisory board, scientists,
- 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,
- Antibodies for cancer
- Big Pharma
- Big Biotech
Graciously submitted by Club Biomed's Recording and Procedural
Partner, Mr. Garrett DeYulia.