Valuing a biotech, particularly one with no commercial products, is
always going to be a controversial exercise. Having written on stocks
for a public audience for over a decade (and for institutions before
that), I'm still surprised at the number of people who will make
comments like "that biotech has no earnings, it's worthless!"
It's an even more challenging exercise with a stock like Arrowhead Research (ARWR),
though, as so much of the value of this company lies in its basic
technology - technology that will really only show its worth over many
years of clinical development work. It's dangerous to say that Arrowhead
will be just like Alnylam Pharmaceuticals (ALNY)
in a few years, so it deserves a similar valuation. I do believe that
you can attribute almost half of the company's value today to its lead
clinical compound and that leaves what I think is a pretty modest
valuation for the company's overall technology platform.
Please continue here:
Arrowhead Research - Ground-Floor Opportunity Or Biotech Bubble Baby?
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