www.taipanonline.com Next page … 3       As a firm believer that Big
Pharma’s best days are over, I’m
now committed to a different strategy
when it comes to healthcare compa-
nies: always have the world’s best
biotech companies as a key compo-
nent of my longer-term portfolio.       That’s why, for the last five years,
I’ve held on to only one stock through
the good times and the bad. That com-
pany is Amgen (AMGN:NASDAQ).       But on April 25, I thought, “Have I
made a mistake holding Amgen this
long?”       Why? Because over the last 28
months, Amgen’s stock hasn’t made
any significant move—either up or
down. It’s simply traded in a range
between US$52 and US$60.       During this lull, however, a new
top biotech company has swept in
and knocked Amgen to #2 on the
“world’s top biotech” chart.       That company is Genentech
(DNA:NYSE). Genentech’s double
blitz against cancer On April 25, the National Cancer Institute announced that Genentech’s
top breast cancer drug Herceptin cut
the risk of recurrence in half when
given after surgery.       This major announcement came
just ten days after Genentech reported
that its top colon cancer drug Avastin
also kept early-stage breast cancer
patients alive longer. Nice.       After decades of trying, researchers
at a smaller biotech company had
finally beaten Big Pharma to the
punch—and proved that two drugs of
a new generation could extend the
lives of breast cancer patients.
Naturally, these two announcements
set the medical community abuzz. • Dr. JoAnne Zujewski, head of       breast cancer trials for the NCI,
   said: “These are truly life-saving
   results in a major disease.”
• John McCamant, editor of    Medical Technology Stock Letter,
   said: “Genentech has transcend-
   ed the biotech world.”
• Business Week Online said: “It’s    no accident that Genentech is
   out front in the race to treat
   cancer.”
As a result, Wall Street hand- somely rewarded DNA shareholders.
The stock soared over 18% in just 14
days to levels around US$71. But
more importantly, the move bumped
Genentech’s market cap up to US$75
billion. That blasted it past the top
market cap position that Amgen had
held for years. In fact, DNA now
boasts a market cap greater than
Merck—the fifth lar  gest pharmaceuti-
cal company in the world. Treating and saving       Genentech’s business model
focuses primarily on cancer—one of
the hardest diseases to treat. Through
the company’s clinical trials, it tests
whether its drugs can extend life.       Avastin is just one of the many
results of this successful approach.
The drug won Food & Drug
Administration approval in 2004 for
treating colon cancer. One of the ways
in which it treats cancer is through a
monoclonal antibody that blocks the
formation of blood vessels to tumors.       And in April, Genentech discov-
ered that Avastin could be used for a
targeted cancer therapy. It has the
early makings of a miracle drug—and
some analysts expect Avastin to be
the biggest-selling cancer drug ever.       But with first-quarter sales over
US$200 million, Avastin is just getting
started. Add those sales to DNA’s
other top-line drugs like Rituxan and
Herceptin, and this is one emerging
biotech powerhouse whose shares
you’ll want to own.       A look at Genentech’s two-year
chart clearly shows its strong uptrend—one I believe will continue.
Based on that, I’m recommending
some longer-term DNA options here
in Taipan.       From now until the end of the
year, I think it’s more than reasonable
for Genentech’s stock to rise 25%. Scoop 93% profits as this blockbuster biotech
wages war against cancer T U R B O - C H A R G E D   W E A L T H :   T A I P A N ’ S   B I O T E C H   B U L L E T I N By Bryan Bottarelli