My favorite was the “product asset valuation” method recommended by one of Wall Street’s leading securities houses. Basically, the method involved the estimation of the value of all the products in the “pipeline” of each biotech company. Even if the planned product involved nothing more than the drawings of a genetic engineer, a potential sales volume and a profit margin were estimated. The total value of the “product pipeline” would then give the analyst a fair idea of the price at which the company’s stock should sell.
