Many investors may not be aware that there are two basic types of pharmaceutical products on the market. Chemical Pharmaceuticals are the types that people usually see created from basic chemical compounds. Biopharmaceuticals are created from proteins produced by living organisms that have medical or diagnostic uses. Generally, these are complex macromolecules derived from recombinant DNA technology, cell fusion, or processes involving genetic manipulation.

These studies are no longer the work of science fiction! Protein-based therapeutics is the newest class of compounds being developed in the drug industry, with an estimated 50 coming to market over the next few years, 140 already approved and an additional 500 in clinical trials. These proteins have been found to outperform their chemical peers when solving complex problems. After all, it is DNA that controls the body's actions- it's simply a matter of correcting the problems in the double-helix.

Recombinant protein drugs have three key advantages over traditional chemical pharmaceuticals: safety, cost and efficacy. Since the protein drugs are built from human components, they have a built in safety factor, while the process for developing these drugs is extremely quality controlled. The fact that they drugs are produced from human components also reduces the cost and increases the efficacy of the process. All in all, there are many key advantages from a financial prospective.

China is currently the largest player in the biopharmaceutical industry. Currently, the country produces eight of the world's top 10 genetically engineered drugs or vaccines. Revenues from biopharmaceuticals in China are expected to grow from $4.5 billion in 2005 at a rate of 20% to 30% annually over the next couple decades. The factors influencing this growth are a talented, but cheap, labor pool, the development of a FDA equivalent (SFDA), and the governments efforts to expand IP rights.

So, how can you benefit as an investor? One of the fastest growing and most innovative companies in this sector is a company called Sinobiomed Inc. (OTC: SOBM). The company uses human proteins, or molecules that mimic or block them, to find new ways to treat disease. The process involves removing the DNA from one organism and placing it into a new organism that reproduces to make proteins of potential therapeutic value.

Drugs developed from this process can help solve many of the world's problems while also helping shareholders to profit handsomely. The potential uses for these proteins include: Hepatitis B&C, surgical bleeding, diabetic ulcers and burns, malaria, cancer, rheumatoid arthritis, blood cell regeneration following radio-chemotherapy for malignant tumors, acute liver disease, stroke, blood clots and thrombosis, acute pancreatitis and much more.

Investors looking for more information on this industry as well as Sinobiomed can check out their website at Sinobiomed.com. The company's stock is listed on the OTC-BB exchange under the ticker symbol SOBM.

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Visa Inc. (NYSE: V) shares might not be such a bad deal after the company revealed that it was considering returning cash to shareholders. The credit card company noted at the Lehman Brothers Global Financial Services Conference this morning that it fully expects to return excess cash to shareholders through dividends and repurchases. The company said that such repurchases would be initiated as early as the first quarter of 2009.

Shares of Visa have been beaten off of their 52-week highs despite a strong rise in earnings last quarter. The firm has since raised the fees on transactions using its cards as investors grow concerned about a slowing economy. However, strong positioning internationally combined with an increasing number of consumers using credit cards could help the firm overcome these concerns and profit handsomely despite a declining economic environment.

Unlike rival American Express, Visa does not have to worry about covering losses associated with its credit cards. Rather, it is the member banks that take on all of the lending risk while Visa steps back and collects fees each time its card is used. As a result, the only thing that could drop this stock is a decline in credit card usage. Fortunately, this is a tough environment for many consumers and they are in increasing need of small loans via credit card.

So, is Visa a buy right now? Well, the rise in transaction fees in August should help generate more cash. The company plans on using this cash to prop up its share price by repurchasing shares. Historically, this has helped to reduce the number of outstanding shares, boost its earnings per share, and force a revaluation of its earnings multiple. Ideally, this results in a higher share price for investors as they again see the strong growth in this segment.

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Google Inc. (NDAQ: GOOG) released the beta version of its Chrome web browser last week that will compete directly with market leader Internet Explorer 7, FireFox 3, and Safari 3 browsers. The search giant's latest project is seen by many reviewers as being simpler, faster, and less prone to crashing. The question now is: How will this new browser affect the search giant's bottom line.

When it comes to numbers, Google makes the lionshare of its profits from search advertising. Its Google AdWords program generates more than 95% of the company's revenues, helped by peer publishing via Google AdSense. Moreover, the vast majority of Google's side projects not only lose money, but also do not generate any substantial website traffic.

Many experts see Chrome as not only a web browser, but an effort to take control of Windows users via their most-used application. FireFox's quick market share move against Internet Explorer has already shown that Microsoft can be beaten. Now, with a huge public corporation behind it, many are hoping that Google can do more to take further market share.

So, while the new web browser will do little to impact Google's bottom line right now, it may help them further solidify their lead in search while also moving users out of Microsoft's arms and into theirs. This makes Chrome a new technology that is definitely worth a second look- both for investors and internet users.

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Many investors are losing money in today's market, but at least one appears to be minting it. William Ackman's well-timed bet on Longs Drug Stores (NYSE: LDG) may have netted him several hundred million in mere weeks, but the famous activist is now questioning whether it deserves more. Pershing Square, which he manages, threatened to vote against the deal amid concerns that CVS may not be paying full price for Long's real estate assets.

Real estate is the crown jewel in CVS' deal to acquire Long's. Newly public reports show that CVS put a "conservative" value of $1 billion on 200 Long's retail stores, three distribution centers, and three office buildings. Further, CVS noted that it intends to make money off the assets by either selling them or generating cash through sale-leaseback transactions. Several investors have threatened to vote against the merger by refusing to tender their shares.

The real estate story may also explain why Ackman was interested in the first place. One of the activist investors favorite strategies is to push for value to be unlocked through the same transactions mentioned by CVS above. Target, for example, is one company he owns where he sees the real estate as being worth as much as the entire company if not more. Now that CVS has beat him to the punch, he and other investors are likely to put up a fight.

Arbitrage investors - those that bet on takeovers - have already begun to bet that CVS will increase its bid as shares are trading above the takeover premium. The other options are the CVS will extend the timetable of its tender offer or walk away from the deal altogether. The law firm behind the complaint, BLB&G, has a history with CVS too. The law firm helped force the chain to pay an additional $7.50 per share in its acquisition of Caremark in 2006.

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Yahoo Inc. (NDAQ: YHOO) shareholders are in a world of hurt these days- how would a $33/share offer look now? This question has some people asking whether or not it is time for Microsoft Corporation (NDAQ: MSFT) to come back to the table with its $24/share offer. Microsoft even has some help on the board in the form of an activist shareholder - Carl Icahn - who now has a direct hand in any decision to sell the giant to Microsoft.

Carl Icahn has already talked of selling Yahoo's search business to Microsoft as part of a complex alliance. Under the plan, Yahoo would sell its search business for $1 billion in cash and Microsoft would also become the exclusive search provider on all Yahoo sites for a term of five years. In return, Microsoft would guarantee Yahoo $2.3 billion per year as compensation for search queries generated from Yahoo properties so long as Yahoo meets certain traffic requirements.

The move comes after Microsoft had already broke off merger talks with Yahoo after its board rejected a $33 per share buyout bid, which is about double the current share price. Initially, Yahoo also rejected the idea of Icahn's plan, but quickly had a change of heart when the activist investor launched a proxy contest. To satisfy the dissident investor, he was given a seat on the board and an ability to push the agenda that so many area awaiting now.

What happens now remains to be seen, but perhaps Microsoft will see new opportunity...

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UST Inc. (NYSE: UST) shares are up nearly 23% today on reports that Altria Group (NYSE: MO) is interested in the tobacco company. Yesterday, shares spiked mid-day after a flurry of short-term call option activity ignited takeover rumors. Nearly 12,000 call options were purchased at the October $60 strike by mid-day at around $1.10 per contract, which means someone made a short-term $1.3 million bet. These options are now trading $6.93 per contact, which means that yesterday's speculations are now much richer!

Trader(s) who purchased the $1.3 million stake by mid-day yesterday - before any news at all hit the market - now have options worth some $8.3 million! Not a bad return on investment for a substantial one-day bet on no new news. Now many investors are wondering, rightfully so, who made these trades and if they were on the level. After all, it's not every day that someone can make an off-the-wall bet on out-of-the-money options in the near-term and make a 600% return on investment in a day!

Unfortunately, these types of events are not so uncommon in the stock market...

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Sara Lee Corporation (NYSE: SLE) may be experience a shakeup after the leader of an activist hedge fund gained a seat on the board. Jeffrey Ubben or ValueAct Capital was installed late last week onto the board of Downers Grove-based Sara Lee. Last winter, the activist hedge fund bought up a 5 percent stake in the company amid its multiyear turnaround effort.

Activist investors like ValueAct Capital typically buy into situations where they preceive value is being obstructed by something that they can fix. Usually, this object is bad management, poor capital structure, or other similar factors. While most activists are considered quite determined and even bordering on mean or evil.

However, ValueAct Capital has taken a completely different tone in this case. The hedge fund said at the time of its purchase that it had no plans to push for any significant strategic changes at Sara Lee and was comfortable with the firm's direction. Regardless, many investors are hoping that the hedge fund will work to help management act more quickly to unlock value.

Christopher Growe of Stifel Nicolaus isn't expecting a major change in the company's direction. The analyst insists that ValueAct has historically worked in unison with management to turn a company's performance around. He added that the presence of ValueAct on the board will also keep the transformation of the business moving along and could add a sense of urgency.

Sara Lee is a global manufacturer and marketer of brand-name products for consumers worldwide focused primarily on meats, baking, beverage and household products categories. The company's operations are organized around six business segments with its significant customers including mass retailers and supermarket chains in the USA and EU.

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Liberty Media Corporation (NDAQ: LMDIA) announced that its board is taking steps to convert the tracking stock for Liberty Entertainment into shares in a subsidiary that would hold the unit's assets. In effect, Liberty Media Corporation will spin-off Liberty Entertainment into its own independent public company. This division includes DirecTV Group, Starz Entertainment, FUN Technology, Liberty Sports Holdings, GSN and Wild Blue Communications.

The current plant would put 50% of DirecTV; 100% of Starz, FUN and Liberty Sports; 50% of GSN; and 37% of WildBlue into the new subsidiary. Liberty Entertainment would also be responsible for about $2 billion in debt, which was incurred when the company acquired DirecTV from New Corporation in April. The move will be tax free for existing holders of the tracking stock and will result in a new company called Liberty Entertainment Inc.

Spin-offs like this one can represent opportunity for investors willing to get their hands dirty. Successful spin-offs occur parent companies are looking to unload debt onto a new public entity while divesting their non-core assets. Liberty is a good example in that they are unloading their debt, but they are only giving up a portion of their stake in their entertainment subsidiaries. This means that the new subsidiary will not have complete control over the future of some divisions.

Successful spin-offs also rely on well-incentivized management to take the reins and work to unlock value in the divisions. Unfortunately, Liberty Entertainment will not only lack the control over key divisions, but will also be run by the same management as the parent. Combined, these factors mean that management may be less likely to take action to unlock value or take dramatic measures to improve the businesses.

In the end, Liberty Entertainment's spin-off does not share many of the characteristics that make spin-offs attractive for investors. The only remaining benefit is the fact that investors can assign the entertainment division with a higher valuation given the pure-play nature.

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Hill-Rom Holdings, Inc. (NYSE: HRC) shares could be headed higher after a popular hedge fund disclosed a large stake. Breeden Capital Management disclosed a 5.25% stake in the provider of medical technologies and equipment, which is up from its stake disclosed in the second quarter. The language in the Schedule 13D filing with the SEC was fairly standard, however, reserving the right to contact management but detailing very little.

Shares of Hill-Rom are up 6.5% for the year-to-date after spinning off from parent Hillenbrand Industries. During its last quarter, Hill-Rom reported better-than-expected earnings and raised its full-year outlook. Fundamentally, the stock is trading with a PEG ratio of 1.56, which implies that it is valued higher than its peers even considering its higher growth. On average, analysts have a "hold" rating on the stock with a 12-month price target of $33 per share.

Breeden Capital Management is known as an activist hedge fund among investors and is led by Richard Breeden - a former Chairman of the Securities and Exchange Commission (SEC). The hedge fund is no stranger to activism and many are speculating that it may be interested in taking some action in this holding. Others suggest that they may simply be interested in the upside that often results from a company spun off from a parent. Regardless, their involvement makes the stock worth watching.

Hill-Rom Holdings, Inc., formerly Hillenbrand Industries, Inc., is the manufacturer and provider of medical technologies and related services for the health care industry, including patient support systems, non-invasive therapeutic products for a variety of acute and chronic medical conditions, medical equipment rentals and health information technology solutions. Hill-Rom's product and service offerings are used by healthcare providers across the healthcare continuum in hospitals, extended care facilities and home care settings.

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Aladdin Knowledge Systems Ltd. (NDAQ: ALDN) shares could be worth $13 a share if one activist shareholder gets their way. Jasmine Holdco LLC, which owns a substantial stake in the company, nominated its own slate of directors to conduct a fair process to maximize shareholder value and provide better corporate governance and oversight for the company. The hedge fund also exercised their right to call a special shareholders meeting within the next two months, made possible under Israeli law.

Jasmine Holdco previous announced on August 21st that it submitted a proposal for the company to acquire all outstanding shares of Aladdin by way of a merger transaction for $13 per share in cash. This offer represents a 50% premium over Aladdin's stock price prior to making public market purchases and a 35% premium over its initial 13D filing on August 7th. The letter also described an alternate proposal to acquire Aladdin's DRM business for $125 million to $135 million in cash.

"Repeated attempts to engage Aladdin in constructive discussions about a transaction to combine part or all of Aladdin with SafeNet have produced no results. Aladdin has rejected all of our proposals and has offered no basis for their conclusions and no strategic plan or valuation approach that would result in greater shareholder value than either of the two Jasmine proposals," said David Fisherman on behalf of Jasmine.

"Jasmine is left with no choice but to call an Extraordinary General Meeting of Shareholders. The current Board and management team do not appear to have a genuine interest in exploring Jasmine’s proposals or other value-maximizing avenues for its shareholders. We are eager to continue discussions with our fellow shareholders regarding the state of the company and look forward to joining them in setting Aladdin on a path to maximize shareholder value."

SafeNet is a global leader in information security. Founded 25 years ago, the company provides complete security utilizing its encryption technologies to protect communications, intellectual property and digital identities, and offers a full spectrum of products including hardware, software, and chips. UBS, Nokia, Fujitsu, Hitachi, Bank of America, Adobe, Cisco, Microsoft, Samsung, Texas Instruments, the U.S. Departments of Defense and Homeland Security, the U.S. Internal Revenue Service and scores of other customers entrust their security needs to SafeNet. In 2007, SafeNet was acquired by Vector Capital, a $2 billion private equity firm specializing in the technology sector. For more information, visit www.safenet-inc.com.

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