Biotech stocks have started off the new year on unstable ground,particularly with news that



problems with cancer-fighting drug Erbitux ran deeper than initially thought.

Details of the Food andDrug Administration's refusal-to-file letter were released in

TheCancer Letter

newsletter and when Wall Street caught wind of it, ImClone'sshare price plunged as one analyst after another downgraded the stock.

As it looks now, ImClone will conduct additional trials anddelay its filing for Erbitux. Wall Street pumped and then dumped ImClone,but the company and its drug still have potential. First of all, commonsense tells you that

Bristol-Myers Squibb

(BMY) - Get Report

must have seen the medical data andthe FDA filing for Erbitux before agreeing to its megadeal with ImClone last September. If so, it apparently didn't stop Bristol-Myers' desire to partner up with ImClone.

Then there's ImClone's presentation to the American Society of ClinicalOncology (ASCO) in May 2001, which added credibility to ImClone's science. ASCO is highly regarded in the scientific community, so all is not lost with Erbitux; it's simply traveling along a winding path with some roadblocks along the way.

Why would an investor want to consider a poorly-rated stock? Let's look at it this way: A highly-rated stock means a lot of people already like it. If you like it, too, you're just following the herd. This style of me-too investing may be OK, but it's better to get there first and blaze the trail. Truevalue is added only if the investment opinion is different, counter-consensus and, of course, on the money.

As I mentioned

last week, at somepoint in time, ImClone's share price will reach bottom. So watch the shareprice, volume and news to determine the time to act. Meanwhile, get to knowthe company inside and out. To succeed in biotech investing, an investormust have some patience and set guidelines, like the amount of riskyou're willing to take. It's a waiting game, but a trained eye can spot anopportunity.

The high-profile story of ImClone has definitely added some spice tothe biotech sector. And if this is any indication of how this sector will behave in 2002, the tempo is going to be fast and exhilarating.

Nadine Wong is the editor, publisher and co-founder of the

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and contributes a weekly biotech column to this site. At the time of publication, Wong had no position in any of the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While she cannot provide investment advice or recommendations, Wong invites you to send comments on her column to

Nadine Wong.

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