At some point, everyone who ever tries to predict what will happen when a small or medium-sized public biotech company comes to a crossroads has had to confess that there's no sure thing in the life sciences industry. Confronted with the doubts and fears of a small investor who found that out the hard way after betting on Amylin, Forbes' Robert Langreth puts it down to the Vegas syndrome.
"The harsh truth is that investing in a small or even medium sized biotech company is a lot like gambling in Las Vegas," writes Langreth. "You are either going to win big or lose big and--short of a true medical breakthrough--it is almost impossible to predict in advance what will happen. Even the companies don't know what will happen. Small, impossible to predict differences in side effects between otherwise similar drugs that emerge late in trials can mean the difference between one drug not getting approved at all and another becoming a $5 billion bestseller."
Companies can't accurately predict events. Analysts can't accurately predict outcomes. And journalists are no better. Keep that in mind the next time you hear someone make a confident forecast about the future of biotech.
- here's the full column from Forbes