Investing in Biotech: How to Profit from the Biopharmaceutical Revolution

Jane M. Wilson is a Toronto-based chartered financial analyst in the
investment business.

Professor Harper says, “biotech investors must have ... patience and a
strong stomach.” They also need a road map through molecular biology
to understand what biotech companies actually do. This book meets this
need. An exploration of the different branches of drug research
necessarily starts with genetics 101, which leads to explanations of
proteomics and genomics. Following this are the categories and
pathologies of diseases of interest to biotech companies. Harper does a
commendable job in explaining complex science to the layperson, and much
of this material will fascinate those who, irrespective of their
investment strategy, are curious about human ailments. Those who just
want to know where the money is and not what the science is may find it
somewhat daunting.

A successful drug can earn revenues of hundreds of millions, if not
billions, of dollars. However, drug development is a long, complex
process that is heavily regulated and full of pitfalls. In Harper’s
view, the key to successful investing in this field is understanding
this process. Biotech stocks also do not lend themselves to classic
investment analysis, so the author suggests different valuation
parameters. Some are logical, but some measures for rating the
attractiveness of individual stocks will have experienced investors
scratching their heads. Some of the prolixity can be irritating. Those
who would read this book need neither a paragraph explaining bond prices
and interest rates nor lengthy metaphors illustrating simple ideas.

The book is not just a general work. There is specific information on
many companies, their products, and their current research. In such a
rapidly changing field, any information may be out of date before
publication. Nonetheless, this book, whose coverage includes Canadian
companies, which is written not by an investment analyst but by a
scientist who knows the underlying physiology, will be much welcomed by
investors and analysts.