Previous Columns
8:30 AM EST Friday, September 8, 2006: I don't want to achieve immortality. I just want to live forever. I'm having so much fun eyeing all the wonderful investment opportunities floating over my desk. That's the good news. The bad news is that checking them takes huge time. There lurks in each one a "gotcha" -- one little quirk I didn't see that will mess up my brilliant and optimistic calculations. Finding "gotchas" is the key, and bloody hard work. No amount of due diligence can replace 20 years in the industry. Which is why, when I do due diligence, I always ask questions like "What's the absolute worst thing that can happen?" "What haven't I thought about?" "What question would you ask that I haven't?"

This horrible chart could spell a long-term opportunity. Pick up a few shares. Put them away. Cross your fingers. The price is right, i.e. cheap. And the company is making real progress.



Aspiring oncology (cancer) drug companies have been doing awfully of late:



Better to buy companies when they're in the toilet, i.e. still aspiring, than when they're flying high and hideously over-priced. How overpriced can they become? Check out Celgene (CELG) which is in the same business of fixing cancer. Its market capitalization is $14.4 billion and its price earnings ratio slightly north of 500. When they fly, they fly.

Investing in biotechs is modified gambling. Will their drugs pass muster with the FDA? Will doctors prescribe them? The "good" news is that people with cancer will pay basically anything for a pill that extends their life, even for a few weeks. The greatest news is that we're learning more about how to fix cancer and getting better at it.

Vioquest (which I have shares in) explained to me:

The "war on cancer" began 30 years ago with a Congressional mandate. Since that time, significant advances in the treatment of some cancers have been achieved, but overall progress has been disappointing. The recent introduction of targeted therapy and personalized medicine appears to be finally changing the tide of the war on cancer. The concepts underlying this new approach are five-fold: first, that there are important cellular pathways, extending from the cellular membrane to the cytoplasm and nucleus, that are activated to initiate and perpetuate cancer; second, that inhibition of critical steps, so-called targets, in these pathways can inhibit cancer; third, that it is technically possible to develop compounds which block these targets in malignant cells, while minimally affecting normal cells; fourth, that each patient's tumor has an identifiable profile of targets upon which his/her tumor depends for survival; and fifth, that giving the right targeted compound to the right patients can improve that patient's survival without exposing the other patients to compounds from which they are unlikely to benefit.

Among these targets are protein kinases and protein phosphatases. Some cancer pathways behave like interlocking cascades in which each phosphorylated kinase phosphorylates or activates the next target, in a pre-determined sequence. The end result is uncontrolled cell division cycles, suppression of apoptosis (cell death) ; promotion of angiogenesis (new blood vessel formation around a tumor,) tumor invasiveness and ability to metastasize.

Some targets, however, are composed of a unique group of phosphatases which behave differently than the attenuating phosphatases described above. These phosphatases, known as negative regulatory phosphatases, actually promote cancer.

Vioquest Pharmaceuticals' compounds are VQD-001/Sodium Stibogluconate, which inhibits two phosphatases called SHP-1 and SHP-2, and VQD-002/Triciribine-P, which inhibits phosphorylation of the AKT protein tyrosine kinase.

Comfortable -- Part 2: From today's New York Times, the headline reads, "Hewlett-Packard Spied on Writers in Leaks". The story reads:

SAN FRANCISCO, Sept. 7 — The California attorney general’s investigation into the purloining of private phone records by agents of Hewlett-Packard has revealed that the monitoring effort began earlier than previously indicated and included journalists as targets.

The targets included nine journalists who have covered Hewlett-Packard, including one from The New York Times, the company said.

The company said this week that its board had hired private investigators to identify directors leaking information to the press and that those investigators had posed as board members — a technique known as pretexting — to gain access to their personal phone records.

In acknowledging Thursday that journalists’ records had also been obtained, the company said it was apologizing to each one. “H.P. is dismayed that the phone records of journalists were accessed without their knowledge,” a company spokesman, Michael Moeller, said.

In an interview Thursday about the state’s criminal investigation of the Hewlett-Packard matter, Attorney General Bill Lockyer said, “A crime was committed.” ...

Travis Dodd, general attorney with AT&T Services in San Antonio, who is working with the California prosecutors, said the records of John Markoff, a reporter for The Times in San Francisco, were a “target of the pretexting” in 2005. Two other news organizations, the online technology news service CNET and The Wall Street Journal, said they had learned that their reporters had also been targets.

A top Hewlett-Packard official indicated earlier this week that the effort to obtain phone records had begun in January 2006 after an article appeared on CNET with accounts of a Hewlett-Packard management meeting. Those revelations prompted H.P.’s chairwoman, Patricia C. Dunn, to order an investigation of leaks, and the company has conceded that subterfuge was used by a subcontractor to gain phone records in the investigation. ...

An article in The Wall Street Journal said records of its reporter, Pui-Wing Tam, had also been a target of pretexting activity.

The US Tennis Open is on. Nadal is out. Roddick is in. Blake is out. This weekend are the semifinals and the final. Today is sunny. For the day's Schedule of Play, i.e. who's playing, click here.