Looking over all the biotech stock stories I covered in 2004, I'm pleased to report that I was right more than wrong. My "win" column does veer in the bearish direction, which is not ideal (I'd prefer more of a balance), but then there were some spectacular biotech blowups in 2004 of which I had the good fortune of being on the right side. Here, then, is my self-graded report card for 2004.

The Hits

My highlight reel has to start with Genta ( GNTA) and its oh-so-controversial "antisense" cancer drug Genasense. I've talked in the past about how long it takes for biotech stories to reach their denouement, and after two years of skepticism in this column, it wasn't until May 2004 that Genta finally fell apart on the negative vote from a Food and Drug Administration advisory panel. Persistence and a lot of good research paid off on this one. Today, Genta is weakened but still alive, still trying to get Genasense approved. But I think the tough lessons learned in the spring have helped biotech investors become savvier and less gullible -- a good thing. Grade: A.

Cyberonics ( CYBX) was a gut-wrenching test of the confidence in my research this year. After poring over clinical data and listening to as many experts as I could find, it became clear to me that the medical-device maker's VNS Therapy System would not -- should not -- be approved for the treatment of severe depression. The clinical data put together by Cyberonics were shoddy and unclear and simply didn't justify FDA approval -- and that's what I wrote repeatedly through the spring.

So I was more than a bit disheartened in June when an FDA advisory panel voted to recommend approval of the VNS device. Despite the setback, I stuck to my original thesis, believing the FDA would disregard the panel recommendation and reject Cyberonics' application for lack of convincing clinical data. I was proven right on Aug. 12 , but all the noise around a possible takeover of Cyberonics kept the stock in play, and that knocked my grade down to an A-minus.

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) 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). 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").

And what was I thinking when I figured value investors would appreciate Intermune ( ITMN) for its work to develop a new hepatitis-C drug? Obviously, I wasn't thinking at all! Too many problems at Intermune and too long to wait for a turnaround. Grade: C.

I still like Biomarin Pharmaceuticals ( BMRN), but distractions and managerial screwups have made this a trying year. I'm tempted to take an incomplete, but the taskmaster in me says "C."

I took an incomplete on Sonus Pharmaceuticals ( SNUS) last year , figuring that 2004 would be the year of major progress on its Taxol reformulation. Stupid me. Grade: D.

The incomplete list for the year includes American Pharmaceutical Partners ( APPX), though an FDA decision on its breast cancer drug Abraxane is due on or before Jan. 8. I'll also take a wait-and-see on my latest controversial and bearish pick, Celgene ( CELG). On the bull side of the ledger, it's been a long year of waiting for Axonyx ( AXYX), but an incomplete is necessary until clinical data are made public early next year.

I'm sure I'm forgetting some good picks and pans for the year. If you think I'm neglecting something, or if you take issue with some of my grades, drop me a line.
Adam Feuerstein writes regularly for RealMoney.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to adam.feuerstein@thestreet.com.

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