Many investors have difficulty in rationalizing stock market valuations accorded early-stage medical technology companies. We have studied the issue at some length and have concluded that there are a number of criteria that appear to correlate well with high-end valuations:

A well-regarded management team. The skill set should include science, in-depth experience in guiding projects through the FDA approval process, marketing, general administration and finance.

High-quality science. It is usually a plus if a company’s lead scientists have advanced degrees from well-regarded universities and associations with prestigious centers of medicine.

A variety of potential applications from the core technologies.

Multiple drugs in the research and development pipeline.

Advanced clinical trials. Investors should be mindful that the failure rate of drugs that enter human clinical trials is extremely high. Therapies that have made it into late-stage clinical trials generally have below-average risk profiles, as well as more-finite time frames to commercial possibility. An abundance of clinical data might also be useful in explaining away any negative experience encountered in the trials. The failure rate of drugs that enter human clinical trials is 30% by the end of Phase I, 67% by the end of Phase II, 70-75% by the end of Phase III and approximately 80% before the FDA grants its required marketing approval (this data was supplied by the FDA at its own Web site: http://fda.gov).

Therapies for conditions that presently have inadequate means of treatment.

Sizable potential markets.

Large-company investors and/or partners. These entities have generally performed a high level of due diligence before making such commitments, and they often bring strategic benefit to the relationship. A small company’s association with a well-known entity is usually viewed as a validation of the science and strategy.

Financial wherewithal. A company’s cash position should be measured against the rate at which funds are being spent. A proven ability to raise fresh capital is a plus, since projects seem to have a tendency to stretch their originally expected time frames.

The Research Works, LLC

Latest Blog Entries 

Fisker Automotive Announces a Letter of Intent for Assembly Contract With Valmet Automotive
Tuesday - July 15, 2008 @ 4:27PM Pacific.... IRVINE, Calif., July 15 /PRNewswire/ -- Fisker Automotive, Inc., a green American premium car company, today announced that Valmet Automotive will manufacture its first production car, the Fisker Karma. Known for producing high quality specialty cars like the Porsche Boxster and Cayman for Porsche AG, the Finland-based contract manufacturer brings to the Fisker Karma 40 years of experience of working with OEM customers and their wide ranging engineering and production needs. more...

GeoPharma Announces Record Revenues in Third Quarter Results
Thursday - June 26, 2008 @ 1:05PM Pacific....GeoPharma, Inc. (NASDAQ:GORX) (the “Company”) announced today a second consecutive quarter of record revenues reporting an unprecedented $23,890,000 for the fiscal fourth quarter ended March 31, 2008. The highest quarterly revenue total in the Company history represents a 31% jump sequentially versus the 3^rd quarter ended December 31, 2007 and a 68.5% increase versus the corresponding quarter a year ago. GeoPharma finished the fiscal year on March 31, 2008 with total revenues of $57,893,000. more...

Quantum Fuel Systems Technologies Worldwide Set to Join Russell 3000 Index and Russell Global Index
Friday - June 20, 2008 @ 6:30AM Pacific.... IRVINE, Calif., June 20 /PRNewswire-FirstCall/ -- Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW), a leader in the development and production of advanced propulsion systems, energy storage technologies, and alternative fuel vehicles, is set to join the Russell 3000 Index and the Russell Global Index when Russell Investments reconstitutes its indexes on June 27, 2008, according to a preliminary list of additions posted June 13, 2008 on http://www.russell.com. more...

uWink Hollywood Brings New Level of Food and Fun to Hollywood & Highland Entertainment Complex on Tuesday, June 17
Tuesday - June 17, 2008 @ 6:43AM Pacific....uWink (OTCBB:UWKI), an interactive dining experience serving classic American comfort food with a modern twist, opens its doors to a brand new location today at the famous Hollywood & Highland Center in Hollywood, California. Following the success of the first location in Woodland Hills, Nolan Bushnell, former CEO and founder of both Atari and Chuck E. Cheese, now brings his groundbreaking concept to Hollywood! There will be special events and prizes throughout the official grand opening weekend being held on Friday, June 27 through Sunday, June 29. more...

Advanced Cell Technology's Executive Invited to Present Today to FDA Advisory Committee on Cellular Tissue Therapies
Thursday - April 10, 2008 @ 6:23AM Pacific....Advanced Cell Technology, Inc. (OTCBB: ACTC) announced today that Jonathan H. Dinsmore Ph.D., Senior Vice President – Regulatory and Clinical, has been invited to present to the U.S. Food and Drug Administration’s Center for Biologics Evaluation and Research Advisory Committee on Cellular, Tissue and Gene Therapies. Dr. Dinsmore will deliver a presentation today titled, “Safety Considerations for the Clinical Application of Human Embryonic Stem Cells” to the FDA panel, which will convene at the Hilton Hotel in Gaithersburg, Maryland. more...

uWink Completes $10.4 Million Equity Financing

Wednesday - November 07, 2007 @ 5:26PM Pacific....uWink, Inc. (OTCBB:UWKI), a developer of digital media entertainment software and an interactive restaurant concept, announced today that it has completed a $10.4 million registered equity financing. The proceeds of the raise will be used to fund new restaurant development and general working capital needs. more...

Trading Alerts
Micro & Small-Cap Stock Report
Friday - August 1, 2008 @ 6:30AM Pacific....Wall Street sank Thursday, after weak readings on economic growth and the job market touched off renewed concerns about the financial health of businesses and consumers. The Dow Jones industrial average fell more than 200 points. The Commerce Department's report that gross domestic product grew at a 1.9 percent pace in the second quarter disappointed investors. Economists polled by Thomson Financial/IFR had expected growth of 2.4 percent in the broad measure of the economy's health. Investors were also concerned about Labor Department data saying that the number of people seeking jobless benefits jumped to the highest level in five years. Economists warned the weekly figures can be volatile, however, and some dismissed them as an aberration. A $4.5 billion cash offer from Bristol-Myers Squibb Co. for its cancer drug partner ImClone Systems Inc. kept the Nasdaq composite index from falling as sharply as other indexes. In other positive news, oil prices declined, and an index of Midwestern business activity indicated growth. But Wall Street could not shake off its worries about the economy -- particularly after sobering remarks from Former Federal Reserve Chairman Alan Greenspan on CNBC late in the afternoon. Greenspan said he would be more surprised if the United States did not enter recession than if it did. The comments came after Treasury Secretary Henry Paulson said in a speech in Washington that the economy will continue to grow at a moderate pace for the rest of the year, and the government's $168 billion stimulus package had helped grease the economy's wheels. more...

Quantum Fuel Systems Technologies Worldwide, Inc. The Next Big Thing!

OTCBlog WebLog
GOLD STOCKS - A "Perfect Storm" of Gold Price Drivers
Sunday - January 27, 2008 @ 9:45PM Pacific....Gold is seen by many financial professionals as a safe-haven investment for hard times and a hedge against inflation. The inflation-adjusted price of gold has remained stable on a centuries-long scale, although it has varied dramatically over shorter periods in response to such factors as war, inflation, monetary policy and consumer demand. more...

Want More Feeds?