Game,

My experience working and investing in healthcare companies like Cardiogenics is that when all goes well with testing and commercialization of the technologies the companies are acquired before they enter the "middle ground" you describe. Two such companies with which I have experience are ICOS and Centocor; both were acquired by big pharma (Lilly and J&J, respectively) before they ever reported a quarterly profit.

You are correct when you say you may have to wait years before this "middle ground" arrives, if ever. For your information, ICOS launched and sold Cialis for two plus years, with their joint venture booking more than a billion in annual sales but ICOS never reporting a profit. When Lilly became satisfied that the revenue stream was sustainable, they purchased ICOS for a sum that angered many of the johnny come lately shareholders who failed to earn the profit they thought they were due.

Ante