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.
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.