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Report Card 2004: Biotech Hits and Misses

I'm paid to write about health care stocks, so it was more than amusing to find myself poring over traffic accident reports and calculating the number of tiny pills that could fit into the back of a tractor trailer in order to cover Biovail (BVF) this year. The Canadian drugmaker's vehicular mishap and subsequent earnings warning were certainly head-scratchers, but some dogged investigative work uncovered the truth. Grade: A.

Also on this year's honor roll were my bearish coverage of Maxim Pharmaceuticals (MAXM), Pozen (POZN), Cell Genesys (CEGE) and GeoPharma (GORX). No grades here, because most of these were just too easy.

As noted above, the win column on the long side is a bit shorter than I'd like, but I'm very proud of my Biogen Idec (BIIB - Get Report) coverage, especially when I made sure everyone was ready for a potential early filing of its multiple sclerosis drug Tysabri (formerly Antegren). When the good news hit in February, Biogen Idec soared. After the initial excitement, it was time to be a bit more cautious on the stock, and for the most part, I was right there too. While I didn't have the knowledge (or courage) to make a definitive early call on Biogen Idec, I did at least raise awareness of the big February event. Grade: B-plus.

There are some events in biotech that are simply unknowable, but that doesn't mean you can't profit. The trick is having enough information in advance to at least make an educated guess, or play the options correctly. Making sure readers know about catalyst events before they happen -- even if I can't predict an outcome -- is an important part of my job and one I did pretty well this year with OSI Pharmaceuticals (OSIP) and Atherogenics (AGIX). I'll give myself B on both.

Transkaryotic Therapies (TKTX) is another story that has taken a long time to play out, but from the ashes of its big Replagal setback in early 2003, a new CEO was brought on board, and at $4 and a decent pipeline, this stock looked to me to be a nice turnaround play. The stock has run sixfold since then. Grade: B-plus, if only because this one required some extraordinary patience.

The Misses

I had my share of blowups, for sure. I loved the BioSante Pharmaceuticals (BPA) story for its female sex-drive gel, especially because the tiny drugmaker was going to piggyback its way to success on the hard work of Proctor & Gamble (PG - Get Report). But I didn't do enough homework, so when the FDA advisory panel dinged P&G, my bull thesis on BioSante sank too. Grade: D (for "dunce cap").
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