Genomics: Are There Winners Yet? :: Michael Shulman's Biotech Blitz

Genomics: Are There Winners Yet?

Everywhere you look you read something new about life sciences, well, almost everywhere -- blogs do suffer from hyperbole. Uh, where was I ...

You see, I am suffering from a genomic predisposition to dissimulate, be distracted, wander. They call it adult ADHD.

And the proof that genomics is now part of our everyday thinking is that you accept this answer -- it is my genes, not a personality flaw, a bad education or words coming from the mouth of someone in a drunken stupor.

Mendel, the monk, would be happy -- and if you don't know who he is, you have a lot more reading to do. Start with the Selfish Gene by Richard Dawkins, the best book on the intersection of genetics and human evolution ever written.

Where was I?

Yes, genomics: ChangeWave Alliance surveys of physicians and researchers have, for several years, put genomics at the forefront of new technologies and products to help fight disease. The problem for investors is the end products are so far off it is hard to figure out where to invest.

How about the companies making money off of genomic research equipment and services? They are the current winners, and their value was put on display this week with Roche's acquisition of NimbleGen Systems for $280 million -- about $2 million per employee or a P/S (price to sales) ratio of 20 based on 2006 sales and 10 based on this year's forecasted (my forecast) sales. Earlier in the year Roche bought 454 Life Sciences from Curagen.

But you still have a lot to choose from:

Illumina (ILMN), with a trailing P/S of 9.3
Affymetrix (AFFX), with a trailing P/S of 4.8
Luminex (LMNX) with a trailing P/S of 7.7
Applied Biosystems (ABI) with a trailing P/S of 2.75
Beckman-Coulter (BEC) with trailing P/S of 1.56
Sequenom (SQNM) with a trailing P/S of 5.68.

Among the purest plays on genomics equipment, ILMN is the fast grower and market dominator based on trailing 12-month sales, and Affymetrix is struggling with negative growth. Many of these outfits are hooking up with partners to create specialized diagnostic tests based on their genomic technology and databases.

See you soon.

Comments

Everywhere you look you read something new about life sciences, well, almost everywhere -- blogs do suffer from hyperbole. Uh, where was I ... You see, I am suffering from a genomic predisposition to dissimulate, be distracted, wander. They call it adult ADHD. And the proof that genomics is now part of our everyday thinking is that you accept this answer -- it is my genes, not a personality flaw, a bad education or words coming from the mouth of someone in a drunken stupor. Mendel, the monk, would be happy -- and if you don't know who he is, you have a lot more reading to do. Start with the Selfish Gene by Richard Dawkins, the best book on the intersection of genetics and human evolution ever written. Where was I? Yes, genomics: ChangeWave Alliance surveys of physicians and researchers have, for several years, put genomics at the forefront of new technologies and products to help fight disease. The problem for investors is the end products are so far off it is hard to figure out where to invest. How about the companies making money off of genomic research equipment and services? They are the current winners, and their value was put on display this week with Roche's acquisition of NimbleGen Systems for $280 million -- about $2 million per employee or a P/S (price to sales) ratio of 20 based on 2006 sales and 10 based on this year's forecasted (my forecast) sales. Earlier in the year Roche bought 454 Life Sciences from Curagen. But you still have a lot to choose from: