..As promised a brief "post-mortem" of investments gone awry. This being the TECHNE-m.b, there even is a connection to Techne :-) ....

Well , some two years ago, I happily touted 2 new additions to my diversified biotech portfolio on this m.b: Neurogen (NRGN) and Metabasis (MBRX). With NRGN I liked their sound science and long-term experience in the CNS space. Programs, such as their Vanillinoid-Receptor program in collaboration with Merck seemed to hold particular (long-term) promise, and despite their noteworthy track record of failed trials, their other compunds addressing the neuropsychiatric space seemed to have good potential, especially relative to NRGN's market value of something like 100 mill USD. In the similar vein, MBRX had a very diversified pipeline, with some programs (such as the Hypoerlipidemia (TR-beta agonists) program and diabetes program (FBPase inhibitors)) being particualrly interesting. However, I underestimated the danger of their modest cash-balance, which together with the financial crisis meant the death of early-stage companies, such as NRGN and MBRX. In my books, both companies are a 95% loss, going from 10, or so, to 0.2-0.6 USD/share... In fact, these two companies are the only "death row"-biotechs, which I decided to hold onto: Despite their dismail performance and obvious "crash", my original investment-case (their robust pipeline) did not change much at all.
This in itself is all not very interesting, but for documenting, once again, my poor performance in some biotech investments.
More interesting is the fact, that one single company, Ligand (LGND), decided to buy both, NRGN and MBRX, within a couple of months. LGND used to be one of my first pure-play biotech investments, some 10+ years ago: LGND, as well, had a very promising pipeline, but in the end it was the perennial underperformer, and after about 5 years of holding the stock, I sold it without a gain, nor a loss, frustrated at the lack of progress in everything. (Since selling LGND, the stock went from 12 to 2!). In the meantime, however, LGND has gotten a new CEO, and -see-see!- this CEO has recently been appointed to Techne's B.O.D.: For myself this is reason enough to closely follow (with a positive bias) whatever he and "his" company do. What else could I do, but buying recently a small position in LGND (again) at 1.6 USD? Buying LGND I am fully aware of its relatively poor cash position (the same ailment that broke NRGN and MBRX...). I am wondering, how LGND intends to capitalize on the new pipeline-sdditions, but am thrilled to follw the story of "my" NRGN-MBRX-LGND company.

BTW, in the past I invested in another company, Dendreon (DNDN), mainly, because at that time DNDN's Chairman and founder, Mr Henney, was still a member of Techne's B.O.D . DNDN turned out to be good investment -albeit the most vertiginous one I have ever had, apart from Elan (ELN)- and I sold the position about 2 years ago at 23 USD. After reading an excellent recent Interview with Henney, I decided to step back into DNDN (at about 24 USD), this time because I think a major deal or buyout will be done within the next 3-12 months. FWIW

regards

Dr.John

PS:Still very optimistic about my four largest life-science holdings at current prices. Had I none, I'd buy happily: Techne (TECH), Qiagen (QGEN), GenProbe (GPRO), and ST Jude (STJ). QGEN, BTW, recently got amazingly prominent press coverage in the US-media: A week ago a positive front-page article in BioCentury, now a prominent and positive story in Barrons "weekly trader" column.