Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Tuesday, July 12, 2005: Every
great boom was preceded by a frenzy of patent filings. The patents were the
technology on which the new firms were financed, staffed, launched and later
bid up on stockmarkets. Ultimately most firms failed. A few were super successful
and those lucky investors became rich beyond their wildest dreams. Meantime
the world was changed. So it was with technology revolutions of the railroad,
the light bulb, the telegraph, the telephone, the automobile, the radio, the
TV, microwave, fiber optic, the personal computer and the Internet.
And so it will
be with life sciences. 50% of all patents being filed today cover advances
in life sciences. Today, keeping Americans healthy accounts for 16% of
our GDP and is fast approaching 20%. You and I will forgo spending on
travel, clothing, restaurants, cars -- in fact everything except the medicines
to keep us alive and healthy. For those life sciences companies whose drugs
work, are prescribed by doctors and are used by patients, the rewards are 95%
profit margins and enormous wealth creation.
As everyone knows, I've been a fan of biotech and own companies, including Hana
Biosciences, Manhattan Pharma, Novadel, Point Therapeutics, and TriPath
Imaging. Yesterday I met with the head of a big biotech company. It was
a life changing meeting. (I can't tell you his name, for now.) I am now resolved:
1. To aggressively study biotech. See below.
2. To buy more biotech stocks. I don't know which ones yet. But I have been
turned on. Nothing will stop my enthusiasm. Exhibit 1 is today's Health Journal
column from today's The Wall Street Journal:
has not gone unnoticed. Genentech's market cap is now $88.2 billion. That's
more than Google, more than eBay, and ten times my beloved Whole
Foods. As Genentech blows, other biotechs will also:
one of the worst forms of breast cancer has become potentially one of the
In recent weeks,
the standard treatment has changed for women diagnosed with HER2-positive
breast cancer, an aggressive form of breast cancer that often recurs soon
after chemotherapy. The drug Herceptin, which has been approved only for women
with advanced disease, is now being used to treat women with early-stage HER2
cancer. The change follows a May report that early Herceptin use lowered the
risk of the cancer coming back by 52% -- one of the largest gains ever in
the battle against breast cancer.
What is so surprising is that HER2 breast cancer has long been one of the
scariest forms of the disease. About 25% to 30% of women diagnosed each year
with breast cancer -- or about 50,000 U.S. women and about 250,000 women world-wide
-- have tumors with too many copies of the HER2 gene. This makes the cancer
far more likely to return after chemotherapy.
times of HER2 cancer patients are less than half those of other types of breast
cancer. But Herceptin appears to be now changing those odds. "HER2 positive
may very well be the first subtype of breast cancer where we look back and
say, 'We cured this type of breast cancer,' " says Eric Winer, director
of the breast oncology center at the Dana-Farber Cancer Institute in Boston
who has also received funding from Herceptin marketer Genentech.
The greatest thing
about biotech is you can map progress mathematically:
1. Figuring the market for a successful drug is easy because the figures on
who's sick and thus who will buy your drug are freely available.
2. Drugs pass through testing Phases at the FDA. Each successful test lifts
the company's value. The rise is predictable.
There are risks.
Most companies won't succeed. But the ones that do will more pay for those who
On leaving the meeting, my man handed me a copy of this book. It's not very
good. But it covers some bases.
You can buy it
for $5.99 from BookCloseOuts.com. Click
here. They also have two other biotech books -- Biotech Investing by
James MCcamant, and The Biotech Century by Jeremy Rifkin. I'll buy them today.
night I went on Amazon and bought the shop:
+ "Understanding Biotechnology" by Aluizio Borem; Paperback; $26.39
+ "The Biotech Investor's Bible" by George Wolff; Hardcover; $19.77
+ "The Billion Dollar Molecule: One Company's Quest for the Perfect Drug"
by Barry Werth; Paperback; $10.50
+ "From Alchemy to IPO: The Business of Biotechnology" Cynthia Robbins-Roth;
+ "The Biotech Investor: How to Profit from the Coming Boom in Biotechnology"
Tom Abate; Paperback; $10.20
+ "Building Biotechnology: Starting, Managing, And Understanding Biotechnology
Companies" by Yali Friedman; Hardcover; $23.07
Anyone got any
better ones they recommend?
Hersh on Deep Throat:
Seymour Hersh is an aging, talented investigative
reporter. Here's how he ended a recent short piece on the discovery of Watergate's
Deep Throat. It's genuinely comforting:
of 1973, the White House coverup was unraveling, and the stalking of Richard
Nixon by the wider press corps had begun. Woodward and Bernstein had been more
than vindicated. The Nixon Administration, mired in a losing war in Vietnam,
was also losing the battle against the truth at home. Throughout the two-year
crisis, Watergate was perceived as a domestic issue, but its impact on foreign
policy was profound. As memoirs by both Nixon and Kissinger show, neither man
understood why the White House could not do what it wanted, at home or in Vietnam.
The reason it couldn't is, one hopes, just as valid today: they were operating
in a democracy in which they were accountable to a Constitution and to a citizenry
what held its leaders to a high standard or morality and integrity. That is
the legacy of Watergate.
-- a Nice Place to Visit:
Australians don't take themselves too seriously.
It's one of their great charms. I know. I was born there.
The Sydney Opera House, $100 million over
budget. But no one cared because it was financed with endless lotteries. Worth
seeing. Sydney's Harbor is the best in the world.
below about Australia are from potential visitors, some of whom are clearly
not very bright. They were posted on an Australian Tourism Website and the answers
are the actual responses by the website officials.
Q; Does it ever
get windy in Australia? I have never seen it rain on TV, how do the plants grow?
(from the UK)
A; We import all plants fully grown and just sit around and watch them die.
Q; Will I be able
to see kangaroos in the street? (USA)
A; Depends on how much you've been drinking.
Q; I want to walk
from Perth to Sydney - can I follow the railroad track? (Sweden)
A; Sure, it's only three thousand miles, take lots of water.
Q; Is it safe
to run around in the bushes in Australia? (Sweden)
A; So, its true what they say about Swedes.
Q; Are there any
ATMs (cash machines) in Australia? Can you send me a list of them in Brisbane,Cairns,Townsville
and Hervey Bay? (UK)
A; What did your last slave die of?
Q; Can you give
me some information about hippo racing in Australia? (USA)
A; A-fri-ca is the big triangle shaped continent south of Europe. Aus-tra-lia
is the big island in the middle of the Pacific which does not... oh forget it.
Sure, the hippo racing is every Tuesday night In Kings Cross. Come naked.
Q; Which direction
is North in Australia? (USA)
A; Face south and then turn 180 degrees. Contact us when you get here and we'll
send the rest of the directions.
Q; Can I bring
cutlery into Australia? (UK)
A; Why? Just use your fingers like we do.
Q; Can you send
me the Vienna Boy's Choir schedule? (USA)
A; Aus-tri-a is that quaint little country bordering Ger-man-y, which is...oh
forget it. Sure, the Vienna Boys Choir play every Tuesday night in Kings Cross,
right after the hippo races. Come naked.
Q: Can I wear
high heels in Australia? (UK)
A; You are a British politician, right?
Q; Are there any
supermarkets in Sydney and is milk available all year round? (Germany)
A; No, we are a peaceful civilization of vegan hunters/gatherers. Milk is illegal.
Q; Please send
a list of all doctors in Australia who can dispense rattlesnake serum.(USA)
A; Rattlesnakes live in A-meri-ca which is where YOU come from. All Australian
snakes are perfectly harmless, can be safely handled and make good pets.
Q; I have a question
about a famous animal in Australia, but I forget its name. It's a kind of bear
and lives in trees. (USA)
A; It's called a Drop Bear. They are so called because they drop out of Gum
trees and eat the brains of anyone walking underneath them. You can scare them
off by spraying yourself with human urine before you go out walking.
Q; Do you have
perfume in Australia? (France)
A; NO, we DON'T stink.
Q; I have developed
a new product that is the fountain of youth. Can you tell me where I can sell
it in Australia? (USA)
A; Anywhere significant numbers of Americans gather.
Q; Can you tell
me the regions in Tasmania where the female population is smaller than the male
A; Yes, Gay nightclubs.
Q; Do you celebrate
Christmas in Australia? (France)
A; Only at Christmas.
Q; I was in Australia
in 1969 on R+R, and I want to contact the girl I dated while I was staying in
Kings Cross. Can you help? (USA)
A; Yes, and you will still have to pay her by the hour.
Q; Will I be able
to speak English most places I go? (USA)
A; Yes, but you will have to learn it first.
+ Steve Jobs Commencement Address. The text is available:
Click here. The full audio is available. Click
+ The March of the Penguins, an exquisite movie. Click
+ When to sell your stocks. Click
This column is about my personal search for the perfect investment. I don't
give investment advice. For that you have to be registered with regulatory authorities,
which I am not. I am a reporter and an investor. I make my daily column -- Monday
through Friday -- freely available for three reasons: Writing is good for sorting
things out in my brain. Second, the column is research for a book I'm writing
called "In Search of the Perfect Investment." Third, I encourage
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