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Harry Newton's In Search of The Perfect Investment Newton's In Search Of The Perfect Investment. Technology Investor.

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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:

Almost overnight, one of the worst forms of breast cancer has become potentially one of the most curable.

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.

Average survival 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.

Herceptin's success 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:

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 don't.

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 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.

Last 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; Paperback; $11.90
+ "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?

Seymour 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:

By May 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.

Australia -- 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.

The questions 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 population? (ITALY)
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.

Recent column highlights:
+ Steve Jobs Commencement Address. The text is available: Click here. The full audio is available. Click here.
+ The March of the Penguins, an exquisite movie. Click here.
+ When to sell your stocks. Click here.

Harry Newton

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 my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. That money will help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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