Club Biomed &endash; Meeting Minutes &endash; 17 Mar 2004

Social phase and monthly contribution collections and discussion. Discussion of sell strategies. How can we decide if a company that has appreciated considerably might have an inflated price and be worth selling? Teva was touched on briefly and some people suggested we maintain the stock. Then, Carlos suggested selling based on annualized rate of return, which he described in more detail after the Celgene presentation (see below).

Jeanne and John reported on the status of Club Biomed's real portfolio, benchmarks & indexes.

Stockwatchers. Some new stockwatchers assigned. Others summarized here for the record, and they are listed on the club's web site.

Report from the 2003-4 audit committee. Judy presented the theory behind this year's audit strategy as follows: (1) Five members were chosen at random. (2) Compare monthly member contribution with unit value. (3) Check that member is allotted correct number of units corresponding to their contribution. Check total contribution for membership duration versus total units allotted, according to monthly market value. Everything checked out. It was asked whether or not the numbers were checked against E-Trade website and they were not. John proposed that the binder he established with all E-Trade trades and statements could be reviewed to address this concern.

Taxes. Carlos will email them out shortly. In fact at the time of writing these minutes he already emailed all tax related information to partners.

Review in brief of binary event stocks presented at last meeting. Genta (GNTA). Connie via John. Progenics (PGNX). Chuck & Jordan via John.

Quick presentations. Celgene (CELG). Dasha and Carlos. Thalomid is their number one product which is FDA approved for treatment of leprosy complication (acute cutaneous erythema nodosum leprosum (or ENL), although importantly now in clinical trials for several types of cancer as we think leprosy market to not be that profitable. SNDA accepted for FDA review for multiple myeloma. Thalomid interferes with bEGF and VEGF signaling, also inhibits TNFa gene activation by decreasing NF-kB binding, inhibits growth of plasma cells through caspase-8 activation and apoptosis, may promote growth of stimulated CD3 T cells increase IL-12 or interferon alpha secretion. Issue is the toxicity of Thalomid, do we as a people still remember enough not to take it?? Also have Ritalin and Focalin (chirally pure form which are approved for AD/ADHD). Also have IMiDs (immunomodulatory drugs, thalomid analogues with some unique properties and less side effects), SelCIDs and kinase inhibitors in various stages of trials. Have extensive corporate and academic collaborators, including at Weill Cornell. Importantly have a good platform of proprietary technologies including those for drug discovery, pharmacological RNA mapping analyses (like DNA chips but better), and IkB kinase signalsome (to evaluate IkB inhibitors). Although they have competition from several angles they have $$$ to invest. Good patent position. But why is it so expensive?? We are witnessing birth of a pharmaceutical company. Emerging product sales may make CELG profitable even as it grows its R&D line. Group think it is pricey yet with great growth potential over next 3-12 months. Also, not exactly our area of expertise. Recommend to buy at $41 and sell at 50% annualized rate of return (see below).

Carlos explained how he would like to buy and sell stocks based on annualized rate of return. Essentially he would like to set buy and sell prices based on getting a 50% annualized rate of return. So if you buy at $38 as was suggested for CELG you would sell once it hits $45 which is 50% annual return rate (although you probably sell way before 1 year).

However, the partners voted to try to purchase CELGENE at 38 (although John emailed us after meeting to let us know stock was up beyond 38 so we did not end up buying at this time, indeed it was around 47 and is now heading north of 48).

Other conversations.

-- Joe talked about pharmaceutical importation issues from Canada and how we felt about it.

-- We added Dendreon (DNDN) in virtual portfolio.

-- It was mentioned to discuss a potential sale price for TEVA but in the interest of time Carlos suggested would be a good email discussion.


Planned Agenda items for April and May meetings:



- Submitted by Andrea Hooper