When Robert Kupor, a biotechnology consultant with Cable, Howse, and Ragen in Seattle, was asked by some clients recently to evaluate a company’s new treatment for emphysema, he put aside his MBA and picked up his Ph.D). in molecular biology. His scientific sleuthing, which involved poring over conference abstracts and talking with researchers, allowed him to judge the potential market for such a technology with an understanding that went far beyond the fledgling firm’s management skills, capital base and marketing strategy.

In fact, a lack of solid scientific information is frequently the reason for miscalls, according to some financial analysts. Traditional tools of financial analysis, they say, are insufficient when it comes to handicapping the new wave of high-tech firms.

A misinterpretation of clinical data and a failure to check facts, for example, led an Eberstadt Fleming analyst to downgrade its rating of Genentech last summer. It later retracted its...

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