For starters PE ratios don't make much sense in terms of the typical business model in this space. Research expenditure is discretionary so it's nonsense to rank a company solely on whether it decides to spend more money or less money on research for new or evolving pipelines.
My tiny biotech could spend $50m on research in a year (if it had that sort of cash ) ..... and book the loss. It doesn't have that sort of cash BUT it is making money on some pipelines and has a reasonable cash balance. However, adding profits from one pipeline to net losses on other pipelines to get a nonsense PE ratio points to stupidity.
Successful investment in this small to medium biotechs is generally about "deals" and M&A opportunity. Deals and opportunities don't usually arrive at the door until pipelines are resonably mature and at least some valuable piplines are derisked. Anticipating likely timeframes is therefore of critical importance. So is understanding the science you are investing in, the risk, the e opportunity and a fall back position should one or two of your company's pipelines not go as planned.
Against the clock there is always be a fight to the death between expanding opportunity and shareholder dilution. The longer the likely timeframe the greater the chance dilution will overpower opportunity...... unless your biotech HAS other (hopefully growing and material) revenue streams. Predicting this sort of stuff required good knowledge of the micro market of a company's offerings and scientific fundumentals.
