Never mind the Dividends - for now it's all about...

Never mind the Dividends - for now it's all about POHTENTIAL.

Oscar's Guide to Biotech Value.

♦Stage of development: Assess what stage of development the company is at in order to estimate the time frame in which earnings can be expected. The process to commercialisation can be long - the development of a successful new drug can take many years from the first stages through to distribution. Companies with a drug candidate in late stage clinical trials would be expected to earn revenue sooner than a company with drugs in the early stages of development. This does not mean that later stage companies are necessarily better investments over the longer term - they are just closer to generating income and so are probably less risky.

"Recently the POH product pipeline has advanced in catlike leaps and bounds and none too far away from a big oxycodone fuelled shareprice pounce."


♦Product pipeline: Look at how many products the company has in development. A company that diversifies across a range of product types will be less volatile than a company with only one product in the pipeline. Companies that have a spread of drug candidates through each trial stage are probably less risky.

"With our multi-purr-pohse TPM platform even nine lives won't be long enough to exhaust all the pohtential applications."


♦Cash reserves: Early stage biotech companies can consume large amounts of capital for research and development, and may not report earnings for a number of years. For this reason it is important to look at whether the company has adequate cash reserves.

"We've had some furballs but thanks to Bodyshaper Cellulite Contour Creme at minimum expect sufficient funds in the kitty for ongoing research, cat raise for upcoming oxy trials notwithstanding."


♦Regulatory considerations: Look at the type of biotechnology company and its products. Regulatory approval time will vary according to the type of product. Regulatory approval for devices and equipment in the healthcare sector is swifter than approval for prescription drugs.

"Pussycat Pohssycat where have you been? Fast tracking OTC Elixia cosmeceuticals by order from Esra, our queen."


♦Intellectual property: Biotech companies protect their technology with patents. Much of the value of a biotech company comes from the knowledge contained in their patents and staff. Patents for new drugs and therapeutic products give the owner the right to exclusive exploitation for a period of 20 years. When the patent for a prescription drug expires, other companies are allowed to begin production of that product.

"POH has TPM registered and patented worldwide. (ref Annual Report page 24-25) We only formulate for customers in our own cathouse."


♦Platform technology: Platform technology has the potential to yield a range of many different drug candidates, as opposed to a technology that yields only a single or limited amount of products. Assess whether a company has platform technology, as it is generally more valuable and less volatile.

"TPM's multitude of applications can't be beaten for versatility in the biosector and hence value. Given POH's diversity we're bound to land on our feet."


♦Markets: Think about what disease the company's products are targeting. Look to see whether there are existing drugs to treat the disease, and what the estimated demand for the new drugs would be.

"TPM is manna for fat cats & big markets. Whatever ails Pain therapy,Diabetes, Psoaris, Cellulite pohtentially we've got it covered. (I'm rather partial to Mastitis Management 'coz I like my milk pure."


♦Senior management and other key staff: Look at whether the management of the company has a good track record in delivering successful research milestones. It is also important to consider the commercialisation strategy of the company and the quality of scientific advisers. Strong financial management is vital given the early cash burning nature of biotech companies.

"There's evidence to suggest several corporate advisors are marking out their claim on our register. IMO well published CEO Dr Esra Ogru and her R&D team has us just a whisker away from financial independence."


♦Clinical trials: Monitor the results of clinical trials to see how the drug/product performed.

"The Bodyshaper results are already in and they are spectacular! Cream de la creme. Expect more of the same from our partnership with 3m, with the oxy patch trials resulting in what will be controlled catnip for the pain afflicted and a thumbs up endorsement from the FDA ."

Signing off for now but with all of the above in mind-