Sanofi-Aventis (SNY) pulled the New Drug Application for its obesity drug Acomplia, called Zimulti in the U.S., and said it would resubmit to U.S. regulatory authorities at a later date.

It's good for the FDA panel that rejected the drug. This is the wrong kind of treatment for the nationwide epidemic of obesity. I don't want to get into too many details but Acomplia is an example of a new kind of drug that sort of treats a wide variety of maladies -- none in a compelling way -- and has lots of side effects that scared off the FDA. If this segment interests you, keep an eye on the clinical trials for pramlintide from Amylin (AMLN) -- it is much closer to getting it right.

What we need is a twofold approach to obesity: how to prevent it and how to cure it. They are very different needs.

Preventing obesity is about the kind of food we eat, how much we eat (or feed our children), and how much exercise we get. Once someone is 10% or more overweight for a year or so, then that person is bordering on having a medical illness. If a person is more than 10% overweight for more than a year, he/she has a real medical problem that could be a permanent problem. Not an addiction, not a psychological problem, not a lack of discipline -- a disease.

Unfortunately, most big pharma (and a lot of little pharma) research has focused on the wrong solution: how to suppress appetites, control behavior, etc. Acomplia/Zimuilti fit this mode.

Well, an appetite manager isn't going to cut it! One-million years of human evolution has trained the species to resist starvation -- and when you go on a diet you are starving yourself -- so 40,000 generations of natural selection kick in and the typical diet fails because the body is biologically trained to the effort to slim down and resist starvation.

A whole new approach is needed - and Acomplia was not it. I'm actually complimenting the FDA on something it did. Wow!

More on that later. Now I need to go eat my 260 calorie, healthy breakfast -- not a Nutrisystem -- just pita, fat-free Greek yogurt and strong black coffee. I was in a Middle Eastern mood this morning, family from Israel are staying with us.

Of course, they wanted Chinese food last night. What's an analyst to do?!

A few days ago a critically important ruling came down from a Federal judge, a ruling that seems limited in its' scope but is not.

The judge said that receiving an FDA approval and label - basically how the drug is to be used, including warnings - does not protect a drug manufacturer from a patient claim that the warnings were inadequate. The ruling came in the context of a suit against Merck about its arthritis drug, (and purported heart attack causing drug) Vioxx.

The judge was somewhere between unambiguous and strident in his decision, which is just fine with me. "The FDA's current view on the question of immunity for prescription drug manufacturers is entirely unpersuasive," said U.S. District Judge Eldon Fallon. The decision was handed down on July 3rd.

Merck had asked for a dismissal of the lawsuit on the grounds the FDA had given it approval to market the drug with warnings, and this regulatory stamp was a go-ahead for the company that made it immune from lawsuits.

What the judge may not have thought through completely was the impact of a negative ruling - assuming it stands up through the appeals process - and that is simply that the label would mean very little anymore.

And, if I were a plaintiff's lawyer (which means I would be wealthy enough to write this and 10 other blogs every day, not to mention having time to write the great American novel) I would take this ruling and say, "Hey, the FDA label means nothing. Anyone who has an adverse reaction to a drug, even if there's a warning label, is a client."

Good job, Merck.

Technically, the lawsuit said the warning was not enough. And, technically, the judge ruled the driver behind the decision was pure legality: The decision said the patients could sue in state courts, regardless of the label warnings, because there is no redress for harmed patients through the federal court system.

The judge actually wrote, "Because there are no federal remedies for individuals harmed by prescription drugs, a finding of implied preemption in these cases would abolish state-law remedies and would, in effect, render legally impotent those who sustain injuries from defective prescription drugs."

That is true. So Merck screwed up twice - it not only helped create a legal decision that made labels useless in a defense against a plaintiff's lawsuit, it reinforced lawyers' belief they would do much better in state courts, where they pretty much start these kinds of legal proceedings, anyway.

Let's give them - Merck I mean - a trifecta in the "screw up department." This decision, if upheld by the Supreme Court (and I think it will be given its bias towards states' rights), could also be applicable to other claims by federal agencies that their regulatory imprimatur obviates states rights and the ability of consumers to sue in state courts. The final word on this is probably three years away as the case winds its' way to the Supreme Court.

Bottom line: believe it or not, I like tort attorneys - most of the products I own or would consider buying (other than those made in China) are better because of these vultures. Yes, vultures, who serve a vital purpose in the legal ecosystem. Yeah for them, they should get more aggressive and be fair - almost an impossibility given the personality profile of the tort attorneys I have met.

And for investors, the threat or reality of lawsuits just got a bit riskier for stocks.

FOLD, JAZZ, SIRT. Time for a look.

Not so fast - why busted IPOs?

Biotech IPOs continue apace, but there is a continuing drift by investors from the speculative to the more conservative. These three companies went public on the strength of their investment banks as much as their own prospects - and perhaps for that reason the stocks have all drifted down and are now bouncing off bottoms. So for technical reasons (not to mention that they may have bright prospects) it is time for a look.

FOLD: No, this is not a company making a drug to help poker plays or laundromat employees. Amicus Therapeutics has created what it calls pharmacological chaperones targeted at rare, genetic diseases. Their drugs aim to fix proteins that do not work properly due to a genetic mutation. The first target is something called lysosomal storage disorders, and its most advanced compound is Amigal, currently in Phase II trials for the the treatment of Fabry disease, a rare disorder that causes kidney failure, heart problems and cardiac abnormalities.

The company went public at the end of May, came out just above $14, popped to near $17 and is now trading just above $12. This is a very-early-stage company and came out, in my opinion, because of the troika of investment banks making fees - excuse me - finding gems for patient investors: Morgan Stanley, Merrill Lynch, and JP Morgan.

JAZZ: This company certainly has jazz - and a big pipeline - all related to nervous systems and psychiatric disorders, historically a tough marketplace for smallish companies It has too many products in the pipeline and in trial to discuss at length, but the ones closest to commercialization may be of real interest to the psychiatric community - including treatments for depression (another serotonin inhibitor).

JAZZ's potential products are targeting epilepsy and bipolar disorder, a drug for that new disease that is all the rage, restless leg syndrome and for the treatment of panic attacks that come with panic disorder. Its edge or differentiator is the use of proprietary technology to create extended-release formulations (long lasting) of known and effective chemical compounds.

The company raised about a $100 million the first day of June, the IPO being priced at $18, way down form initial expectations of $26-$28 and now trading at $16. Another set of blue chip underwriters could not keep the price up -- Morgan Stanley, Lehman Brothers, Credit Suisse and, oh yes, Natexis Bleichroeder.

SIRT: This is the company that is going to make us live longer by working with the key ingredient in red wine - resveratrol - rather than have us all become drunk and fat trying to live longer. The world's leading scientist (and a highly successful self promoter) leads the company and he has a sound business model. The company is targeting Type 2 diabetes with its first drug.

Why not aging? Because the FDA odes not recognize aging as a disease (yeah!) and you cannot get an FDA approval and validation for a treatment for a non-disease. I have written about resveratrol a couple of times in my newsletter. It is a fascinating concept and this makes SIRT similar to many of the biotechs that went public in the late '80s and early '90s based on the resume of the founder and the power of the underlying scientific concept -- rather than something more concrete.

The company went public near its current price, $11, popped to above $13 and is now trading around $11, having bounced off a bottom just under $10. The company was brought public by J.P. Morgan, CIBC, Piper Jaffray, JMP Securities and Rodman & Renshaw. The diversity of these underwriters may explain why the stock has held up better than its brethren going public at roughly the same time.

I am looking at all three right now - let me know what you think - these may only be a trade, not an investment, but it is hard to imagine all three will stay below or at their IPO price for too long.

I am not, by nature, a basher. I don't typically put forward negative ideas, but then again, China is, well, China.

Yesterday the Chinese proudly announced to the world they had executed the former head of their equivalent of the Food and Drug Administration for corruption that led to approval of drugs that killed as many as 12 Chinese people.

What the government didn't mention was that he failed to oversee manufacturers who made, for example, toothpaste that killed hundreds (perhaps more than a thousand) children in developing nations. I guess those kids don't count. After all, they weren't Chinese. And, most importantly, the Chinese wouldn't want any information to get out that might hurt the export market.

This sham of justice was designed to sell developed nations on the notion that the government is cracking down on improper food, food ingredient and drug production. Yeah, right.

Ever been to China? Like any other country, the individuals you meet are different in some ways, but in many other ways are like you and me -- but put the Chinese in the cultural, political and economic context of their nation and all bets on them being the same as us are off.

Today, China makes our old wild west look like a Quaker town meeting. It is completely overrun with corruption, conspicuous consumption, nearly total disrespect for intellectual property and the rules that (we hope) dominate business in the developed world. There is a terrible disregard for what we call here business ethics -- an oxymoron to some, not to me. Twelve Chinese people die and the guillotine returns!

A couple of months ago the head of the FDA (in the spirit of Harry Potter we will call him "he we do not name") overturned an advisory committee recommendation to approve the prostate cancer drug Provenge. Assuming the committee was right -- and the head of the FDA wrong -- between 50,000 and 80,000 men will die early or needlessly because of his ruling. Gee, that's a lot more than 12. Lucky for him he did this out of the goodness of his heart in an attempt to protect the American people -- and not to make a fast buck Chinese style.

What does this have to do with investing? Not much I guess, except that I get at least one e-mail a week inquiring about a Chinese drug company or a Chinese nutraceuticals and herbal remedy outfit.

Stay away! That country is so corrupt -- and so distant from us in time, ethos and the practice of Western standards of research and regulation, only an idiot would use a medical product made there and only a trader or the willfully ignorant would invest in a Chinese drug or nutraceuticals company.

If you disagree, I have a great tip on where you can buy property that has the real fountain of youth, I swear...

I have long told our investors to avoid RNA interference stocks because the science is unproven. If you want to speculate, you can do so on more proven science.

I have also written that investing based on the hope of a major partnership or buyout is a sucker's game. Well, these two rules backfired on me this week and bite me on the butt. Alnylam (ALNY) announced a ginormous (just added to the official Webster'; Dictionary, much to my kids' pleasure and my discomfort) drug deal with Roche.

I don't care! You need the metaphorical leather butt to do what I do -- nevertheless, in the interest of public service I have put together a list of names you can investigate on your own and get more hits on this blog as investors frantically search for RNA stocks.

• Alnylam (ALNY)
• AP Pharma (APPA)
• Cytrx (CYTR)
• Genta (GNTA)
• Isis Pharmaceuticals (ISIS)
• Invitrogen (UVGN)
• Nastech (NSTK)
• Sangamo Biosciences (SGMO)
• Sentek (SNKTY)

This is your research job and many of these companies seem to have done as much work on their press releases as they have on RNAi.

What is RNAi?

In the past decade or so, RNA -- a cousin of DNA (look it up on Wikipedia, I can't do everything for you here) - has been shown to have a much more prominent role in cellular activity as a regulator of behavior. Modify RNA behavior and you can modify a disease.

A couple of products are wending (not winding -- look that one up too) their way through the labs and development process. The closest one, for age related macular degeneration, is from what used to be called Sirna, now part of Merck, the first RNAi deal to bite me you know where.

Nothing else appears close. If I sound cranky, I am - my butt is beginning to ache.

A question was asked about the cost/benefit of Byetta plus oral meds versus insulin. I am not a physician, but I know something of diabetes treatment and the progression of the disease, and the current medical approach is to slow the progression of the disease and to use insulin as a last resort after oral and other meds fail to control glucose. This approach may be more expensive but is the standard of care in the developed world.

This article is more about the everyday miracles in medicine we often take for granted -- as patients, onlookers and investors -- than strictly about investing.

This past weekend, I attended a concert by Ronan Tynan at The Great Auditorium in Ocean Grove, New Jersey -- a smallish venue that has the best acoustics I have ever experienced as a consumer of concerts and music. I attended the concert in the hope he would sing one particular song, Isle of Hope, Isle of Tears, that's a song about the first person ever processed on Ellis Island, the quintessential Irish immigrant, Annie Moore.

Annie Moore was my grand aunt, my grandfather's sister and my grandfather, Philip Moore, was the third person to be processed on the island.

I went to the concert with my two distant cousins who live in Ocean Grove, and whom I met for the first time last year when my grand aunt was properly identified by a genealogist as being "the" Annie Moore, the first person to be processed on Ellis Island.

My cousins and I weren't disappointed as Ronan sang Isle of Hope, Isle of Tears as the last song of the concert before the obligatory encores. And he introduced us to the crowd, simply because we were related to Annie.

But all of the applause really belonged to Mr. Tynan, for he sang as if his voice was born divine and he moved around the stage, and danced a bit, as if he has two good legs. He does not - he wears two prostheses inside long black pants, which makes him somewhat stiff-legged, somewhat stiff backed, a medical miracle and one of the toughest men I have ever met, which we did after the concert.

And, most of the people in the audience knew this about Ronan, made note of how he has overcome much, and then, likely, forgot about it.

We all do that everyday as our children have cavities filled, eye glasses are exchanged for contacts or Lasik surgery, hernia surgery is now outpatient care and the sterile couple has several children. Overcoming medical problems is all commonplace, almost ordinary - and almost all of it new in the past 25 years.

There is a belief, now being found in the voices of almost everyone running for president, that we spend too much money on healthcare in this country. We certainly waste too much of our healthcare money in this country. In fact, my guess is 30%-40% of the total tab (more than half a trillion dollars) is wasted. We spend too little on certain kinds of healthcare that would save us money in the long run and improve and extend lives.

But spend too much? James Tobin, who already has one Nobel Prize for economics, has explored the topic and believes, using a rather lonely voice, that increased spending on healthcare increases productivity and increased spending may actually be good for the economy. I tend to agree.

I am sure Ronan Tynan agrees - and my family, having been through hernia, back and thyroid surgery, a broken leg repaired in a physician's office, a serious neurological tic,
root canals and more that I can't remember, would agree.

All of the procedures and treatments have enabled us to be more productive members of the community and the economy. And, as the nation sees this side of healthcare spending -- and if politicians can redirect healthcare dollars and get out of the way of the incredible creativity found in the industry -- the opportunities for investors will only increase.

I took one of my sons for his annual physical this morning at a seven-physician pediatric practice that provides great care, along with high fees. And, given what I do for a living -- writing ChangeWave Biotech Investor -- I looked around at everything in the office. Today I saw the great visual metaphor, and spoke to that metaphor, telling the story of why Big Pharma is declining and biotech is the place to invest.

While waiting for the pediatrician to finish his private conversation with my son, I spied a flier highlighting the Blue Duck Tavern, one of may favorite restaurants in Washington, D.C., and one of the better places to eat in the city. A drug company, GlaxoSmithKline (GSK) was promoting a new, one-treatment-for-all-allergies medication and was inviting the healthcare professionals in the practice to put on the feedbag and learn (from another physician), the value of the drug. Next to the flier were samples and next to the samples was a brochure for another asthma medication.

I had decided to write about this example of nineteenth-century product development and marketing when a young woman, obviously in sales, with her black rolling bag in tow behind her entered the practice. Since I am so shy, I moved forward, noticed she had a GlaxoSmitheKline (GSK) button on her jacket, and made a comment about the Blue Duck Tavern.

She was clueless about the restaurant, and it turned out she sold vaccines -- a big and growing business for GSK. Obviously, different drugs, different sales forces. She sounded a bit worn down by selling vaccines as her comments indicated that it was a tough business, which meant she was selling something not mandated by the CDC (Centers for Disease Control) or that had a lot of competition.

So, one target market, two sales organizations and three products -- all providing (a good assumption about the vaccines, I know it is true for the other medications) marginal and incremental benefits over existing products. Is this the kind of company that excites you?
Or even an outfit making another statin or asthma inhaler? Not me.

I like companies with new ideas and brand new kinds of treatments: Amylin's (AMLN) Byetta for diabetes, Genentech's (DNA) Avastin for various forms of cancer, Allergan's (AGN) lap bad instead of full gastric bypass surgery, and so on.

If you want 5% growth, security, maybe a dividend -- then fine, invest in Big Pharma.

If you want aggressive growth, the occasional homerun and the very occasional, but still possible rocket ship stock, invest in companies that make new products that change the world -- or at least the life of the individual patient.

I went to see the fifth Harry Potter movie today, as a prelude to locking myself in with some Chinese food and the seventh and last Harry Potter book this weekend. And I walked away, as I always do, refreshed.

Refreshed? Yes.

J.K. Rowling's books, while a bit short of real literature, do continue the great tradition of English myth -- Potter being the heir to King Arthur, Frodo and Luke Skywalker. Simply put, the young anointed one exposed to or embodying, both dark and light, good and evil, and forced to make choices about which side he will turn to. All, of course, with the salvation of others (usually innocent) hanging in the balance.

Sounds like a college student choosing between a career in medicine or on Wall Street. And, dawgonit, I like tales of good versus bad, light versus dark, money versus new molecules!

The Potter books and films tell us how much our society lets our young shape their own lives, and how much we depend on them. More importantly, the tales let us know how important magic is to all of us.

No, not real magic -- I'm not allowed to write about real magic in a blog read by muggles -- but whispered magic that keeps some of us thinking about the forces that shape our future. More importantly, these books and films spur the imagination and get the mind cranking - and who knows where that could take all of us?

Science, and a loudly stated belief in what science can do for us, is the magic of the 21st century. Harry will battle the Dark Lord Voldemort, while our young anointed ones (if they can get into college without playing lacrosse and if they are willing to graduate $250,000 in debt) can become the next Harry Potters, using the magic of science to combat disease, aging and famine -- not to mention hangovers, bad tasting diet food and the common cold.

I actually thought about some of this during the movie. It was very good and in my opinion the best since the first movie. This one realized that if Harry Potter inspires kids to dream and believe (somewhat) in magic then society's future may be a bit better.

In fact, creativity and imagination are central to scientific discovery. The inventor of inhalable insulin was first inspired to look at inhalation as a way to deliver serious drugs while imbibing a not-so-controlled substance as possibly the only PhD. grunt in Vietnam. How many major scientific breakthroughs have come from Asian countries practicing a Confucian form or education emphasizing rote learning rather than creative thinking?

So the extent to which JK and her publishers have pushed children to dream more, believe a bit more in some form of magic, to let their imaginations play a larger part in their lives, then we are, indeed, in her debt. If you still think this is a stretch, the U.S. and the UK produce, arguably, 90% of the world's wholly new medical products - perhaps more. And they do it with less than half the developed world's population. Magic, and the belief that almost anything is possible, has its benefits!

And, if Rowling gives away her first billion and decides she needs to make more, she should hit the lecture circuit and talk to the folks in the big pharmas. They need a whole bunch of creative inspiration!

There was more bad news today on Glaxo's (GSK) Avandia and Pfizer's (PFE) Lipitor saw U.S. sales decline 25% last quarter due to generic competition -- there is just no magic there.

Please do see the film, enjoy the new book and hope (better: expect) some avid Potter fan sees magic in molecules.

I typically avoid discussing the stocks I recommend and report on in my newsletter, but this is a rant against the FDA -- specifically the process by which the agency approves or fails to approve drugs for diseases with no treatment, such as advanced prostate cancer.

If you read this blog, and subscribe to my newsletter, you would note I am one of the few analysts who consistently defends the FDA -- but not this time and not on the issue of drugs for the terminally ill.

I believe the statistical fascists at the FDA need to add humanity to their slide rules for certain illnesses - and one of the worst illnesses is advanced prostate cancer. There is no real treatment (there is Taxotere which extends life for nine weeks for the patients willing to put up with its toxicity and side effects) and the men who get this disease die very hard

The drug under consideration is satraplatin, an oral form of a platinum chemotherapy, developed by Spectrum Pharmaceuticals (SPPI), and to be marketed by GPC Biotech and Pharmion. The trial results were a bit mixed, in part because the primary endpoint was not an endpoint previously recognized by the FDA, and, in part, because final survival data for patients will not be available until the end of the year. Frankly, this is all irrelevant! Men with advanced prostate cancer die a an agonizing death after following a terrible treatment regimen.

What's the big deal with approving a drug that may work on a subset of the patients -- the same argument I made here for Provenge from Dendreon (DNDN). These drugs have been shown NOT to harm people, and the trial data suggests satraplatin reduces the progression of the disease and the pain associated with the disease. The FDA should not have convened a panel, it should have just approved the damned drug.

The panel itself will be dominated by oncologists -- and don't kid yourself, they are not there for the betterment of humanity. They are their to represent one point of view -- their point of view.

Many oncologists are fanatical about their own treatment regiments and the doctors who participate in these kinds of panels are even more obsessed by the statistics and data about the drugs. They could give a damn if a subset of patients may benefit. If the treatment doesn't meet statistical goals, it doesn't matter if it's a treatment that's better than anything else out there.

Forget the futility of current treatment, forget that satraplatin is a pill and does not need to be infused like other chemotherapies -- vastly improving the treatment experience for the patient! Just stick with the numbers, the docs say -- the toll on the human beings afflicted doesn't count.
This obdurate attitude is palpable if you attend one of these meetings. I am not going to this one as the meeting on Provenge was enough for me for one year.

I would give satraplatin an even-money shot at getting a panel approval. That does not mean the FDA staff will go with the advisory panel decision if it's positive. After the Provenge debacle anything is possible.

And if it gets voted down, think about this -- the number of men who die every month from prostate cancer is about the same number of boys and girls we have lost in Iraq since the inception of the war (3600-plus). So if satraplatin extended life in a meaningful way for 8.6 percent of the victims of advanced prostate cancer, it would be the same as extending the life of all our soldiers who have died in Iraq.

Forgive the lack of posts last week, but I've been on the road. It was less my speaking engagements at the San Francisco Money Show than vacation time with one of my twin 15-year-old sons -- my baseball player son. (His brother is a lacrosse player.)

We walked the wharf, ate some of the best dim sum in the U.S. (at a restaurant called Yink Seng), discovered two tea-tasting stores in traditional Chinatown, had great sushi and watched the syringe man, Barry Bonds, hit a home run to the raucous cheers of the home-town delusional -- my son's highly visible Stanford baseball hat even made the ESPN highlights.

And we both think Barry Bonds is a disgusting mockery of baseball.

And then there's Cal Ripken, who is a world apart, and did it the right way.

Before the Nats came to D.C., we made many visits to the Orioles' Camden Yards and were in the stands when Ripken hit his 400th homer. If not for 9/11 and the re-scheduling of games, we would have been in the stands for his last game.

The only baseball I ever caught in the stands was a Ripken foul ball -- which he signed (since there is possibly no more fan-friendly player) -- and my sons attended his camp -- with mom and dad paying more than double the regular rate for the the week Cal was actually at the camp the boys got to hit batting practice off of the Hall of Famer. My left hitting son said he could to pitch to lefties.

And yes, there is relevance between Cal and biotechs, as he is a role model for how to manage a biotech company and how to invest in one.

Ripken came to work every day. He's the iron man who shattered a record no one thought could be broken -- 2,632 consecutive games. He was never a lunch pail player -- he was an all star, has a World Series ring and so on -- but work was what it is all about. Not flash, not a super homerun season, not a special chair in the clubhouse, not grand juries and mistresses, just work -- excellent work, sometimes great work, often clutch work, but work.

And that is what you need to look for in biotech companies.

* Not companies living on press releases.
* Not companies rushing to get an FDA approval with a flawed trial design and middling trial results.
* Not companies looking to become billion-dollar outfits overnight and refusing to hook up with larger marketing partners.
* Not companies paying their executives excessive salaries and bonuses even though they are years away from revenues.
* Not a GPC Biotech (GPCB) asking for a drug approval using a trial with primary endpoints never before seen by the FDA.
* Not a Dendreon (DNDN), reacting to a failure with Provenge by rushing to get a new application in that may not only fail but may forever kill the drug.

Look for the Ripken companies -- more like BioCryst (BCRX) bringing in a CEO with operations experience, and having lined up marketing partners and Uncle Sam to take it through its next stage of development as a company.

Successful biotech investors will look for the steady and reliable leadership doing the work that it takes to make a company successful. It is work, and even if we strive for the 10-to-1 or the 100-to-1 payoff, it's not done by rolling the dice on rumors, incomplete information and guesswork. It is about building a portfolio, accepting risk and volatility, riding it out if you believe in the company, and avoiding the temptation to trade.

Forgive the piety and pedantic tone, I really believe this.

And let me tell you why this works and use my sons as an example. My baseball son played rec league ball for eight years, never summer ball, never All Star ball, always worked very hard, took practice seriously, made himself a catcher and a very fine hitter.

He began ninth grade at a very serious sports high school, went to the winter workouts, the team was thin because of seven graduating seniors, and after returning from spring training in Florida (yeah, really -- this is high school!), was the starting varsity catcher. 88 mile an hour fastballs, soon to be Division I pitchers, nasty curve balls, serious baseball.

Why? To quote his coach, he was a coach's kid, took everything seriously, worked hard every inning to improve his game. My lacrosse son is a goalie and had never played before eighth grade. He played middle-school lacrosse as if he were born to do it, went to high school, rode the bench due to a lack of intensity at practice and a queue of players in front of him.

He did not sell off - he joined a weekend league, playing up to four games each Sunday, has been in and out of lacrosse clinics from Johns Hopkins to lessons with the Notre Dame goalie and is totally re-dedicated to hard work this fall.

Yeah, I'm proud of them both, but not for their achievements so much as their work ethic and dedication. It's the Ripken way. And as investors, we should all do the same. Hard work pays.

The two big pharma giants, Pfizer and GlaxoSmithKline, have come down in price in recent years, gotten stuck; moved up, down and sideways -- and more and more analysts are saying they represent "value" especially in light of this week's FDA vote to keep GSK's blockbuster diabetes treatment Avandia on the market.

There is value involved here as in an important term investors need to be aware of: "value trap."

A value trap is easy to understand -- a former growth stock comes down in price and value, and other investors pile in expecting growth to resume, thus making the lower price attractive. The assumption is that growth will pick up. With PFE and GSK, this is a false assumption -- a very false assumption.

Pfizer saw a 25% decline in U.S. sales of its flagship product -- the leading selling pharmaceutical in the world, and my favorite as it lets me eat mostly what I want to eat -- Lipitor. The king of the statins! The drug is under ferocious pressure from generic Zocor, which it should be, for many people (including moi) take it in low doses to reduce cholesterol or as a prophylactic (the way my internist takes it) in the belief statins head off cardiac disease and other maladies.

ChangeWave surveys predicted this as a generic in a market segment, more often than not, seriously damages or kills all proprietary brands in that segment. And the competitive pressure from Zocor is only going to get greater.

Pfizer has also lost patent protection on other blockbusters, but the real problem lies in "the emperor has not clothes" theme -- there is little in the immediate pipeline to compensate for the coming revenue shortfall.

Any growth this year will come from price increases, not real growth. And the situation will worsen, which is why the company announced major restructuring, a reduction in the sales force and the need to license drugs or acquire biotechs to fill its pipeline. This doesn't sound like a growth company to me.

On another front, GSK may have dodged a bullet since the FDA panel voting to keep Avandia on this market with a very serious warning, but Avandia sales have plummeted and they will continue to do so, as diabetes is a very competitive marketplace.

Should a physician start a new patient on a drug that has been shown, statistically, to seriously elevate the risk of heart disease? GSK also has the same problem as PFE -- a weak pipeline and the need to go outside for drugs, as shown by the recent deal with Targacept (TRGT) for that company's technology and early-stage drugs for a variety of illnesses.

GSK has made a major initiative in vaccines, but this is a low margin business with significant growth potential but not much profit potential compared to other drugs. Glaxo has also announced it will lay a bunch of people off and after declining to put people out on the street also said it will buy back a huge number of shares -- a number large enough that its bond rating was lowered to A1 (two notches down from Aa2) -- as the rating agency Moody's said it did not have enough cash flow to make these buybacks and would have to borrow money to do so.

Again I'll ask, does this sound like a growth company to you?

Bottom line: PFE and GSK are safe-haven dividend and stock buyback plays, not growth companies. If you want to take a risk in biotech and life sciences, you should do so only if the potential returns are worth the risk. For the aggressive growth investor, this is simply not the case for these two value traps.