By Eric Pierce
& Shaun Brown
Staff Writers

As everyone knows, the real issue in biotech investing is how long it takes to make any money. Two recent high-profile take-outs - Abbott's $7.3 billion stock buyout of Alza (AZA) announced last week, and Pharmacia & Upjohn's $729 million stock deal for Sugen (SUGN) - illustrate that in some cases, making money in biotech is just a matter of time.

Those who invested in SUGN's October 1994 IPO and continue to hold until they receive $31 worth of P&U stock will make a little over three times their money, or $23.50, on a $7.50 bet. But it will have taken them nearly five years to do it. The annualized return is 32.8 percent a year. The company went public in October 1994, selling 2.7 million shares for proceeds of $20 million. SUGN has raised $197 million since 1991 through a variety of vehicles (see chart). The stock closed Friday at $29.19, unchanged on the week (see BioCentury Extra, June 16).

AZA's calculation isn't as cut-and-dried. It was spun off as a dividend to shareholders of Syntex, now Roche Bioscience, and since has itself issued two stock dividends in the form of R&D spin-offs, and implemented two 2-for-1 splits.

According to the company, the imputed "distribution value" of AZA shares to Syntex shareholders was $26.75 per share. Adjusting for the splits brings the imputed cost basis to $6.688 per share.

AZA closed Friday at $49.938. Rounding this to $50, accounting for the spin-offs would adjust the price to $52.11, according to AZA spokesperson Patty Eisenhaur. This assumes the shareholder immediately sold the spin-off shares and reinvested the proceeds in AZA at its then prevailing market price.

Using this $52.11 as the take out price, "original" AZA investors will make 6.8 times their money, or $45.42. But it would have taken nearly 30 years since AZA began trading on the Pacific Stock Exchange on Dec. 10, 1969. Thus, the 679 percent gain translates into a 7.1 percent annualized return. By comparison, the yield on a 30-year U.S. Treasury bond closed Friday at 6.15 percent. To provide another metric, AZA's shares are up $32.36 (164 percent)in the same time period since SUGN's IPO, which provides a 21.4 percent annual gain.

AZA was up $3.938 on the week.

Cancer dollars

ProQuest Investments has raised $100 million for a venture fund that will invest in a broad range of companies in the oncology area, including pharmaceuticals, medical devices, drug discovery, drug delivery, health care services and the internet. Partners Jay Moorin, former president and CEO of