Interesting article in the latest BRW "Outstanding Small stocks"...

Interesting article in the latest BRW "Outstanding Small stocks" feature regarding Bio Stocks. PGL get a brief mention but the article also includes the following...

"Biotech babble

Biotech companies have a mixed record in providing information to investors. Some behave conservatively and are careful to not exaggerate their progress or prospects. For many others, it is the exact opposite. Claims of progress are exaggerated, negative data is not released, and other critical information is hidden from public view.

The Australian Stock Exchange is starting to tackle the problem of companies that provide misleading or incomplete information. The ASX has drawn up a draft of new reporting rules for drug development companies. Among other things, they propose to specify the way companies will need to report results from their clinical trials.

Joe Anderson, a London specialist in biotechnology investment, gives these tips on making sense of company information.

- Understand the importance of the news. Some news, such as a trial result, is more important than, say, the start of an early-stage clinical trial.
- +++++Do not be swayed by trivial news. A drug in a phase one trial has only a 10% chance of making it to market, a drug in phase two has a 25% chance, and one in phase three has a 75% chance.+++++
- Investors should do their own research about news items, cross-referencing with what is known about related drugs, for example.
- All investors should hold a diversified portfolio, mixing their early-stage stocks with mature cash-generating shares.
- Where possible, avoid companies that are one-drug wonders.
- Avoid speculative stocks in difficult clinical areas.
- Check the balance sheet to see if the company will have to raise money.
- Retain a healthy degree of scepticism."

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+++++ This is why full scale Phase III Trials are very close to the holy grail - Commercialization. 75% of Drugs which make Phase III trials go on to Commercialization.