Clinton Chee has posted a list of factors he thinks is important when analyzing Bio-Tech stocks. This list is summarized below:

• P : Price of stock
• NTA : Net Tangible Assets (Total Assets minus Intellectual property and other intangibles)
• P/NTA : Ratio of Price to NTA - a value of 3 or below is considered underpriced and worth buying. A value of 9 or above is definitely not worth buying
• TEAM : Rating system based on the qualifications of the directors
  1. Professor = 1.5
  2. PhD = 1.0
  3. Master = 0.8
  4. Hons = 0.7
  5. MBA = 0.6
  6. Biotech Exp (10year) = 0.5
• BurnPeriod (Runway) : the number of quarters left before cash runs out, based on the previous quarters cash burn rate. Over 4 quarters is fair. Over 8 quarters is worth investing.
• ProductPipe : the stage of the product development ranging from pre-clinical tests to commercialization. Over a value of 5.0 is a good sign.
  1. Phase 1 = 1
  2. Phase 2 = 2
  3. Phase 3 = 3
  4. Market Approved = 4
  5. In Market =5
• ForeignMarket : Companies with products that sell internationally are more highly rated. (see key below). Over a value of 3 is a good sign.
  1. Plan to Enter = 0.5
  2. Just Entered = 0.9
  3. 1-3 years = 1.5
  4. Over 3 years = 2.0
• Cash/Debt : the ratio of cash to debt of the company.