Social phase, monthly contribution collections.
Virtual portfolios & benchmarks, Club Biomed portfolio, Treasurer's report. Jeannie.
Account Total Value: $23,911.70 (Gain 18.59% - down from 25% last month)
Review of Real Portfolio:
Introduction of Guest Speaker for Next Month who sat in on meeting. Joel Meyer, MRCS, LRCP. V.P., Strategic Planning: Evotope Biosciences, V.P., Corporate Development: BioEquity Partners etc. etc. Joel emphasized putting in time at the beginning to better help you evaluate reports from Wall Street. Quintessential biotech is about a single product. It is a small company that is event driven (studies, programs and clinical trials) and mostly has no earnings. Pfizer is not event driven &endash; even a huge event is not likely to shift stock price very much. Joel suggested we get familiar with SEC documents and patents as they are the bread and butter and since we are scientists we have a unique opportunity to assess them for advantages, errors and crimes.
Educational Session and Discussion. Sell Strategy &endash; How do we know when to sell and how does the stockwatcher help us in this decision.
Part 1. Educational presentation. "What is a stockwatcher to do?" Carlos. What is the club's purpose and how does a "stock watcher" fit in with that purpose? Our goal is to understand the biotechnology, pharmaceutical, medical device, and health care delivery industries and invest Partnership assets securities in these sectors for the benefit of the Partners. The goal of the stockwatcher is to find out a good time to sell. He/she know/decide why we bought it and look at it in these terms. Is it a long-term hold (a solid company that we expect to continue to perform) or a company that we will expect to respond to short-term events? Is our strategy working? Carlos gave suggestions about how to gather the info you need to accomplish this goal such as marking your calendar with binary events, doing internet searches for company or products, reading press releases, going to FDA site, review finances and other company documents etc. Use the info we used to decide to buy to decide to sell, look at the science! Consider how it lies in comparison to the rest of our portfolio (tax consequences). Evaluate the data and make a decision about what to do, approach partners.
Therefore, the take home messages for the stockwatcher are:
Part 2. Discussion. Sell Strategy. This was a lively discussion among members as to how we can restructure the selling strategies to maximize profit (for example what happened with CELG). Generally we all observed that our opinions and actions have been good but we are stifled by the inability to act quickly. Vinny and Neil emphasized that we are interested in a volatile market (biotech) which can work to our benefit yet we are unable to take advantage of that. Neil wanted to know if we could sell in between meetings if the occasion arose, how could we do this? He suggested we put more into stock watching and many people agreed. It was suggested that perhaps there can be 2 (or more) stockwatchers per stock who could be allotted packets of money to work with. Basically it was discussed whether the stockwatchers can be given more autonomy (delegate responsibility) between meetings to sell (and even potentially buy). Joel Meyer made it clear that the buy/sell decision should be made dispassionately because the legwork should have been done already.
We decided that at the next meeting we will discuss this in more detail as it was unanimous that we need to alter our partnership's sell strategy.
A quick stockwatcher report on Cephalon (CEPH). Imke. Should we sell? Vinny, Carlos emphasize that we are not in this club to 'collect stocks'. After a discussion on CEPH (b/c there is no major reason anyone can come up with to hold this stock, no known binary event, we feel like we missed the $60 high b/c of inefficient sell strategies, and in light of the fact that there are other stocks which we would prefer to own) we voted to sell CEPH if it went to or below 50.50 or at or above 55. This was voted on by the partners and passed.
The Binary Event Committee Report. Vineet. Vinny suggested Indevus, a specialty pharm company whose major product is a drug called Sanctura, muscarinic receptor blocker, that stops the desire to urinate. Billion-dollar market ($2 billion in future) and growing as 50% undiagnosed. Sanctura is an extended release of an earlier version. It is already in the UK and IDEV has licensed right to develop it in the US. There is a binary event on May 28th &endash; the PDUFA date. Vinny's investment thesis was that the drug will be approved on May 28th and that the sales of this drug will drive rapid appreciation of IDEV stock and that the company will see stronger support on the Street, driving interest in the story. There are no hidden mines. Only concern was that two pills of Sanctura must be taken compared to one per day of current market leader. Since this is a drug for the elderly another pill really isn't a worry (they are taken at the same time). The only other issue is minor toxicity of dry mouth however severity with Sanctura is less than with market leader &endash; therefore also not an issue. In addition, trial data indicate that Sanctura is even a little bit better than market leader in efficacy. It is not P450 metabolized. Indevus working with Odyssey in US to market who already have 2 drugs in urology so have good connection with doctors and patients. In addition have copromotion and licensing agreement with Pliva, the largest company in Croatia. Joel Meyer pointed out that we should be aware that this is the company after a name change (previously Interneuron) that sold Dexfenfluramine a part of the controversial fen-phen and on another note that also sometimes people sell on good news.
We voted to buy 100 shares at market price. We decided to allow Vinny to follow stock and decide when to sell between a low and high of 5 & 15 dollars, respectively. ***Update from John/Carlos &endash; On 5/20/04 &endash; we purchased 100 shares @ $7.45
Vinny suggested we look at Vicuron (MICU) for next time.
Upcoming agenda items for meeting in June and beyond:
Submitted by Andrea Hooper