Biotech Scorecard: My Best and Worst Calls

It's report card time. I've been going over a year's worth of biotech columns to grade my hits and misses for 2008.

My best call this year was more directional than stock-specific. In mid-February, I reported how the empty rooms and lack of investor interest at the BIO CEO investor conference was a red flag for small-cap biotech stock investing in 2008.

As I stated at the time:

"The reasons are fairly obvious: A nasty stock market and looming threat of recession has put investors in a foul mood. In this atmosphere, risk is most definitely a four-letter word, so there are few institutional investors willing to take on even more by loading up on risky small- and mid-cap biotech stocks."

The situation for small-cap biotech looked bleak then, but I don't think anyone fully knew how bad it would get after Lehman Brothers filed for bankruptcy Sept. 15, causing the whole market to collapse. Many small and early-stage biotech stocks are down 50% to 60% or more in 2008.

Big-cap biotech did offer some measure of protection this year. Generally I was right to recommend Gilead Sciences(GILD Quote) and Celgene(CELG Quote) for most of the year, although both stocks took hard hits in the fall. Being an Amgen(AMGN Quote) bear worked well in 2007, but not so much in 2008, where I wasn't quick or astute enough to pick up the profitable midyear turnaround in the stock.

When it comes to stock-specific calls, I did well with bearish predictions for Elan's(ELN Quote) Alzheimer's drug bapineuzumab and the prostate cancer vaccine from Cell Genesys(CEGE Quote). I wasn't a fan of Vanda Pharmaceuticals(VNDA Quote) and rightly predicted the demise of Myriad Genetics'(MYGN Quote) Alzheimer's drug Flurizan.

I growled the loudest over Introgen Therapeutics(INGN Quote) and, finally, the company blew up spectacularly.

Optimer Pharmaceuticals(OPTR Quote) was a great long pick in the Biotech Select model portfolio, and a short recommendation in Medicines Co.(MDCO Quote) also worked out very well.