I posted a while back on this topic on the ANP board, but I'll...

I posted a while back on this topic on the ANP board, but I'll do it again just so it is clear.

All reports into companies the size of Antisense are paid for, ultimately, by the shareholders of the company. The brokerage on trades for small companies simply does not pay for an analyst's time to sift through companies, find one they believe is worth writing on and then write a report on it (BTW, analysts' are are also usually pretty well educated - BSc(Hons) +/- a PhD, and/or an MMBS +/- a PhD and/or an MBA, consequently they do not come cheap). It is that simple.

How do shareholders pay you might ask? Well, in the case of independent research (like Edison, etc), it comes straight from the company. When the research comes from a broker, say broker X, to be safe, it comes out of the 5% to 7% the broker charges the company for conducting a capital raise (eg $600K on a $10 million raise). How does that come from shareholders? It is 5% to 7% of the funds raised that doesn't go to the company and therefore doesn't belong to you, but you still wear the dilution.

Is broker X's analyst going to stand in the way of corporate (who conduct the raisings and take the bulk of the money) and who are breathing down their neck to get a capital raise away? No, the pay day is too big and they are going to write a report that helps get the raise away or they will end up looking for work elsewhere sooner rather than later. They also will not want to anger those who bought into the raise and their later reports will be positive reflecting that. With independent research, there is also a perverse incentive there. The analyst is being paid by the company, after all. But, if the analyst keeps choosing to write on crappy companies or every company that will pay them, their name will soon become associated with crappy companies and that will not enhance their ability to make money.

As a long-time biotech investor and follower, my advice is this. Do not pay much too much attention to the price target. These companies are incredibly hard to value (I know, I have tried several times). Pay much more attention to the contents of the report and ask yourself, is this logical or is it too good to be true. The old axiom invariably stands up. We have a cure for cancer. Hmmm, bulldust. Companies with proven, appropriately educated, management, and good science, however, are almost always highly net present value positive, but they are risky. The way you get rid of that risk is to diversify your holdings. $30 ($60) bucks in extra brokerage is a bargain for the benefits diversification brings.

Also, do a bit of research yourself. You don't need a background in science, medicine or both, to work out that a technology ain't as great as a company is making it out to be. CAR-T is a classic example. A few successes (pretty much all by very large companies) but a huge number of failures (you can usually multiply the number of failures you do find by five to ten times because companies often only report successes, as determined by actual data (good company), mined data (naughty company) or by using dodgy statistics (naughty company). You do not need to troll through the scientific literature to find this stuff out. There are many free sources of news (eg Endpoints) that aren't too difficult to read that will spell this stuff out for you. Google is also great for getting definitions of words you don't know.

Anyway, I hope this post is of benefit to at least one or two of you. You may already know it all. In which case I apologise for wasting your time, again.

Bill