San Diego Business Journal

Biotech Analyst McCamant Publishes Book for Investors

'Every Investor's Guide' Seeks to Unravel Complicated Science Issues

BIOTECH by Marion Webb, Senior Staff Writer

James McCamant, editor of the Medical Technology Stock Letter in Berkeley, has had his hand on biotechnology's heartbeat since biochemist Herbert Boyer teamed up with venture capitalist Robert Swanson to start the South San Francisco biotech giant Genentech Inc. in 1976.

Biotechnology today is one of the fastest-growing industries with more than 179,000 people working at 1,457 U.S. companies alone, according to the Biotechnology Industry Organization.

Biotech investing is also high-risk and investors need to be in long-term.

Companies now spend on average $800 million in research and drug development costs and take 7 to 12 years to produce a single drug.

But only 1 in 10,000 compounds wins approval by the Food and Drug Administration, according to biotech experts.

For McCamant, biotech investment continues to be an exciting ride.

In his new book titled "Biotech Investing: Every Investor's Guide," McCamant strives to help investors unravel the complicated science and addresses financial and regulatory issues.

"It's a marvelous time to invest in biotechnology bargains are the best since 1994," said McCamant during a recent phone interview.

He blamed the media for having helped create an environment undermining investors' trust in the sector, including ImClone Systems Inc.

"There is no question Erbitux (ImClone's cancer drug) works and will be a major drug," he said. The FDA rejected ImClone's application for the drug's approval, questioning submitted data from clinical trials.

That followed the FBI arrest of ex-ImClone CEO Samuel Waksal on charges of securities fraud and conspiracy on allegations that he tipped off family members to sell their stock. Congressional investigators reviewed Martha Stewart's sale of ImClone stock one day before the FDA decision.

McCamant remains optimistic on the drug.

Among his list of favorite biotech stocks are Isis Pharmaceuticals Inc., a San Diego-based biotech focusing on antisense technology, and Cell Genesys Inc., a gene therapy firm, located in Foster City.

He recommends investors should spread the risk with at least five second-tier companies with products in development and money in the bank in their investment portfolio.

"The smaller the companies the riskier the stock and the more diversification (is recommended)," he said.

His tips for evaluating individual biotechs: Look at their annual financial reports, company news and analysts' research, the latter of which should be taken "with a grain of salt."

In his book, McCamant looks at the risks involved in developing one product vs. another, talks about the importance of patents, goes through the different stages of clinical trials and discusses mergers and acquisitions.

He counts Amgen founder Dr. George Rathman, Genentech's Bob Swanson, and Isis' CEO and chairman Dr. Stanley Crooke among the most significant industry players.

Crooke returned the favor by saying that he has "tremendous respect" for McCamant.

"He is one of the most (important) investors in biotech and one who has the best understanding of the interplay of technology, drug discovery and development and the financial markets," Crooke said about McCamant.

McCamant, who lives in Berkeley, holds a bachelor's degree in social sciences from Stanford University.

He was founder and principal of two brokerage firms , Schaefer, Lowe & McCamant and San Francisco Investment Corp.

He is now editor-at-large of the Medical Technology Stock Letter, a biweekly newsletter.

His book is published by Perseus Publishing and is sold at major bookstores.

Send biotech news to mwebb@sdbj.com.