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Biotechnology
If it's News, it's Hooey

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By davefeatherstone
December 14, 2001

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Been reflecting lately more and more on incredible gap between the reality of biomedical science and the complete horsecrap that is reported in the press.

This morning I read an article about the incredible discovery that the 'startle response' (a flinch) evolved to protect one against sudden blows. No sheet, Sherlock. Appropriately published in a second-rate journal, but it got reported anyway.

Yesterday I read about the discovery of a gene which acts as a 'switch to control lifespan' in C. elegans, which 'may be an analogue to one in humans'. Ooooooooooh. We're all gonna live to be 300 years old. What the article doesn't talk about is that the gene controls something called 'dauer formation'. Basically, when a clump of dirt dries up or the food runs out, these semi-microscopic worms encase themselves in a cocoon, go into a sort of stasis, and wait until conditions get better. These so-called 'daf' genes have little to do with lifespan control, in my opinion. No more than temperature does because worms, flies, etc live longer at cooler temperatures. In short, the 'discovery' is great if you're a worm, but implying that it will help us live longer is a pretty big stretch.

Also saw an article on how 'advances have been made in understanding the genetic basis of schizophrenia'. Not emphasized in the article, of course, is that the results confirm findings known years ago, and only correlate schizophrenia incidence with a chunk of genome representing about 10% of the total. Sort of like 'discovering' the fact that you are probably going to be tall because your older siblings are.

Similarly, I notice a study demonstrating the 'strong genetic basis of brain size and grey matter content' made the cover of Nature Neuroscience (which I shouldn't criticize too much, considering I have a paper in press there, but what the heck...) This 'discovery' has been all over the popular press. Incredible. The study shows, basically, that identical twins not only look pretty much the same on the outside of their heads, but pretty much the same on the inside of their heads too. Uncork the champagne! Notify the eugenicists!

Recently, our lab did a study that picked apart, in flies, part of what may be some aspect of disfunction associated with a gene similar to one associated with heritable mental retardation in humans. This was published in a very high profile Journal (Cell) because it was a significant insight. But no medical breakthrough. By the time it appeared in the press, the work 'showed that the most common form of inheritable mental retardation could be cured with existing cancer drugs'.

I could go on and on describing the HUGE distance between the actual science and what appears in the press. Don't get me wrong, I'm a great believer in biomedical research. I think it's one of the wisest investments our society makes.

But let me tell you how this works, folks:

Joe Blow researcher makes some progress on something. It may be decent progress, it may be insignificant. Whatever. It may be accepted for publication. It might not. Maybe Joe is just taking a trip to a meeting in Hawaii or Amsterdam and wants to justify it. Joe Blow calls or sends an email to the University public relations dept, which distributes a summary to a big list of media contacts. Of course, the University public relation's department's job is to make the stuff sound as exciting as possible. This is P.R., not science. Fundraising, not education. Media folks get the 'press release', and if it has a few catchy words (a disease, maybe an '-omics' word), or it's a slow news day, they print it. Most of these media guys, of course, never took a science course in College. They are the same sort of guys you see working for your College Newspaper now, struggling to appear politically astute and learn to spell. They probably flunked out of the business program. Anyway, the media guys distort it even further. (Here I am reminded of an anecdote where a reporter described in great detail how a colleague was working on something to do with geese. Turns out the reporter had misspelled and misunderstood a technical term, somehow twisted it into 'goose', and extrapolated from there. It was truly bizarre.) Anyway, the basic gist of what I'm saying is: Anything you read has gone through AT LEAST two layers of interpretation, where all parties' goals are HYPE. Sort of like a game of 'telephone' ('chinese whispers' to those of you in the UK), where the rule is: 'when in doubt, exaggerate'. There are good science reporters out there, of course, but they are few and far between. Most of them work for magazines like Scientific American, I think.

My point is: If you are investing based on press releases, or even bothering to read them for any other purpose than maybe momentum buying, then you are doomed. Biotech investing is like any other investing. Biotech stocks are like any other stock. The main difference is the hype. Consider biotechs the same way you'd regard them if they made a 'boring' product:

1) The company has to have a clear plan or product that will earn MONEY. Lots of it. It doesn't matter if they've developed a way to cure farts or make us all live to be 1000. If they don't have a clear plan for SELLING IT, they are bad news.

2) The fact that Joe Blow in Podunk U just discovered a relationship between snot and slipperiness does NOT mean that lubricant manufacturers' profits are going through the roof because of there is now an important new 'all natural biodegradable abundant multi-purpose lubricant and polish'.

3) Even if a company actually has something to sell, and (even better) some business people instead of a bunch of blowhard academics in charge of selling it, their stock is only worth so much. If the stock's market cap is 4 billion, but the company has --at most-- 3 customers, then that's bad news. Yes, folks, a P/E ratio of 600 is as silly here as it is in the brass bolt manufacturing business. And brass bolt designs don't fail in clinical trials. Look at the market caps of Pfizer, Merck, etc. These are relatively old, absolutely humongous global companies with dozens and dozens of products in development. Their stock is relatively pricey lately too, based on earnings and growth. If you are thinking of buying a biotech with no products and a market cap approaching that of the aforementioned 'big boys', think again.

Well, glad I got that off my chest. Thank you for your time.

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