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May 2009



Small cap biotech: the GOOD (part III)

May 11, 2009 – Comments (6) | RELATED TICKERS: MYGN , GHDX , SQNM

I’ve abandoned my attempts to pick GOOD baby biotechs over the last few months as the broad market has rebounded counterintuitively, and I believe that the vast majority of stocks are overpriced for short term performance. While there are still good bets for the long term, I refuse to take an immediate haircut in real life or in CAPS by getting suckered into what I believe is a bear rally of ridiculous proportions. However, two companies in one of my favorite biotech sectors have recently suffered vigorous thrashings which I believe position them to be successful investments in the short-term as well as the long-term. That sector is molecular diagnostics, in which the marketed products are genetic assays rather than pharmaceuticals. The beauty of these products is that they do not need to meet the rigorous safety and efficacy standards of pharmaceuticals and are therefore much more likely to attain FDA approval without the hundreds of millions in trial expenses. The companies that specialize in molecular diagnostics are using cutting edge technology to help physicians optimize the use of approved treatments, which renders those treatments much more effective and valuable.  [more]

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