Reconciling value estimates from the discounted cash flow model and the residual income model

This paper examines why practitioners and researchers get different estimates of equity value when they use a discounted cash flow (CF) model versus a residual income (RI) model. Both models are derived from the same underlying assumption -- that price is the present value of expected future net dividends discounted at the cost of equity capital -- but in practice and in research they frequently yield different estimates. We argue that the research literature devoted to comparing the accuracy of these two models is misguided; properly implemented, both models yield identical valuations for all firms in all years. We identify how prior research has applied inconsistent assumptions to the two models and show how these seemingly small errors cause surprisingly large differences in the value estimates. [ABSTRACT FROM AUTHOR]

Distinction between familial and sporadic forms of colorectal cancer showing DNA microsatellite instability

Attempts to classify colorectal cancer into subtypes based upon molecular characterisation are overshadowed by the classical stepwise model in which the adenoma-carcinoma sequence serves as the morphological counterpart. Clarity is achieved when cancers showing DNA microsatellite instability (MSI) are distinguished as sporadic MSI-low (MSI-L), sporadic MSI-high (MSI-H) and hereditary non-polyposis colorectal cancer (HNPCC). Divergence of the 'methylator' pathway into MSI-L and MSI-H is at least partly determined by the respective silencing of MGMT and hMLH1. Multiple differences can be demonstrated between sporadic and familial (HNPCC) MSI-H colorectal cancer with respect to early mechanisms, evolution, molecular characterisation, demographics and morphology. By acknowledging the existence of multiple pathways, rapid advances in the fields of basic and translational research will occur and this will lead to improved strategies for the prevention, early detection and treatment of colorectal cancer. (C) 2002 Elsevier Science Ltd. All rights reserved.

Evolution of colorectal cancer: Change of pace and change of direction

This review compiles evidence for an alternative to the classical adenoma-carcinoma sequence in the evolution of colorectal cancer. It is suggested that between 30 and 50% of colorectal cancers are not initiated by mutation of the tumor suppressor gene APC, but through the epigenetic silencing of genes implicated in the control of differentiation, cell cycle control and DNA repair proficiency. The precursor polyps are often characterized by a serrated architecture, and include hyperplastic polyps, admixed polyps and serrated adenomas. The alternative pathway is heterogeneous and may culminate in cancers showing low or high level DNA microsatellite instability (MSI-L and MSI-H, respectively), and in cancers that are microsatellite stable (MSS). Cancers showing DNA MSI may be characterized by an accelerated evolution. Cancers in hereditary non-polyposis colorectal cancer show features of both classical (adenoma and APC mutation) and alternative pathways (rapid evolution, MSI-H and lack of chromosomal instability). (C) 2001 Blackwell Science Asia Pty Ltd.

Morphological and molecular heterogeneity within nonmicrosatellite instability-high colorectal cancer

Colorectal cancer (CRC) has traditionally been classified into two groups: microsatellite stable/low-level instability (MSS/MSI-L) and high-level MSI (MSI-H) groups on the basis of multiple molecular and clinicopathologic criteria. Using methylated in tumor (MINT) markers 1, 2,12, and 31, we stratified 77 primary CRCs into three groups: MINT++ (>2), MINT+ (1-2), and MINT- (0 markers methylated). The MSS/MSI-L/ MINT++ group was indistinguishable from the MSI-H/MINT++ group with respect to methylation of p16(INK4a), p14(ARF), and RIZ1, and multiple morphological features. The only significant difference between MSI-H and non-MSI-H MINT++ cancers was the higher frequency of K-ras mutation (P < 0.004) and lower frequency of hMLH1 methylation (P < 0.001) in the latter. These data demonstrate that the separation of CRC into two nonoverlapping groups (MSI-H versus MSS/MSI-L) is a misleading oversimplification.

Research commentary: Information systems and conceptual modeling - A research agenda

Within the information systems field, the task of conceptual modeling involves building a representation of selected phenomena in some domain. High-quality conceptual-modeling work is important because it facilitates early detection and correction of system development errors. It also plays an increasingly important role in activities like business process reengineering and documentation of best-practice data and process models in enterprise resource planning systems. Yet little research has been undertaken on many aspects of conceptual modeling. In this paper, we propose a framework to motivate research that addresses the following fundamental question: How can we model the world to better facilitate our developing, implementing, using, and maintaining more valuable information systems? The framework comprises four elements: conceptual-modeling grammars, conceptual-modeling methods, conceptual-modeling scripts, and conceptual-modeling contexts. We provide examples of the types of research that have already been undertaken on each element and illustrate research opportunities that exist.

The impact of genotyping error on haplotype reconstruction and frequency estimation

The choice of genotyping families vs unrelated individuals is a critical factor in any large-scale linkage disequilibrium (LD) study. The use of unrelated individuals for such studies is promising, but in contrast to family designs, unrelated samples do not facilitate detection of genotyping errors, which have been shown to be of great importance for LD and linkage studies and may be even more important in genotyping collaborations across laboratories. Here we employ some of the most commonly-used analysis methods to examine the relative accuracy of haplotype estimation using families vs unrelateds in the presence of genotyping error. The results suggest that even slight amounts of genotyping error can significantly decrease haplotype frequency and reconstruction accuracy, that the ability to detect such errors in large families is essential when the number/complexity of haplotypes is high (low LD/common alleles). In contrast, in situations of low haplotype complexity (high LD and/or many rare alleles) unrelated individuals offer such a high degree of accuracy that there is little reason for less efficient family designs. Moreover, parent-child trios, which comprise the most popular family design and the most efficient in terms of the number of founder chromosomes per genotype but which contain little information for error detection, offer little or no gain over unrelated samples in nearly all cases, and thus do not seem a useful sampling compromise between unrelated individuals and large families. The implications of these results are discussed in the context of large-scale LD mapping projects such as the proposed genome-wide haplotype map.

Comparison of two population pharmacokinetic programs, NONMEM and P-PHARM, for tacrolimus

Objectives: To compare the population modelling programs NONMEM and P-PHARM during investigation of the pharmacokinetics of tacrolimus in paediatric liver-transplant recipients. Methods: Population pharmacokinetic analysis was performed using NONMEM and P-PHARM on retrospective data from 35 paediatric liver-transplant patients receiving tacrolimus therapy. The same data were presented to both programs. Maximum likelihood estimates were sought for apparent clearance (CL/F) and apparent volume of distribution (V/F). Covariates screened for influence on these parameters were weight, age, gender, post-operative day, days of tacrolimus therapy, transplant type, biliary reconstructive procedure, liver function tests, creatinine clearance, haematocrit, corticosteroid dose, and potential interacting drugs. Results: A satisfactory model was developed in both programs with a single categorical covariate - transplant type - providing stable parameter estimates and small, normally distributed (weighted) residuals. In NONMEM, the continuous covariates - age and liver function tests - improved modelling further. Mean parameter estimates were CL/F (whole liver) = 16.3 1/h, CL/F (cut-down liver) = 8.5 1/h and V/F = 565 1 in NONMEM, and CL/F = 8.3 1/h and V/F = 155 1 in P-PHARM. Individual Bayesian parameter estimates were CL/F (whole liver) = 17.9 +/- 8.8 1/h, CL/F (cutdown liver) = 11.6 +/- 18.8 1/h and V/F = 712 792 1 in NONMEM, and CL/F (whole liver) = 12.8 +/- 3.5 1/h, CL/F (cut-down liver) = 8.2 +/- 3.4 1/h and V/F = 221 1641 in P-PHARM. Marked interindividual kinetic variability (38-108%) and residual random error (approximately 3 ng/ml) were observed. P-PHARM was more user friendly and readily provided informative graphical presentation of results. NONMEM allowed a wider choice of errors for statistical modelling and coped better with complex covariate data sets. Conclusion: Results from parametric modelling programs can vary due to different algorithms employed to estimate parameters, alternative methods of covariate analysis and variations and limitations in the software itself.

Comparison of an ELISA and an LC/MS/MS method for measuring tacrolimus concentrations and making dosage decisions in transplant recipients

This study compared an enzyme-linked immunosorbent assay (ELISA) to a liquid chromatography-tandem mass spectrometry (LC/MS/MS) technique for measurement of tacrolimus concentrations in adult kidney and liver transplant recipients, and investigated how assay choice influenced pharmacokinetic parameter estimates and drug dosage decisions. Tacrolimus concentrations measured by both ELISA and LC/MS/MS from 29 kidney (n = 98 samples) and 27 liver (n = 97 samples) transplant recipients were used to evaluate the performance of these methods in the clinical setting. Tacrolimus concentrations measured by the two techniques were compared via regression analysis. Population pharmacokinetic models were developed independently using ELISA and LC/MS/MS data from 76 kidney recipients. Derived kinetic parameters were used to formulate typical dosing regimens for concentration targeting. Dosage recommendations for the two assays were compared. The relation between LC/MS/MS and ELISA measurements was best described by the regression equation ELISA = 1.02 . (LC/MS/MS) + 0.14 in kidney recipients, and ELISA = 1.12 . (LC/MS/MS) - 0.87 in liver recipients. ELISA displayed less accuracy than LC/MS/MS at lower tacrolimus concentrations. Population pharmacokinetic models based on ELISA and LC/MS/MS data were similar with residual random errors of 4.1 ng/mL and 3.7 ng/mL, respectively. Assay choice gave rise to dosage prediction differences ranging from 0% to 30%. ELISA measurements of tacrolimus are not automatically interchangeable with LC/MS/MS values. Assay differences were greatest in adult liver recipients, probably reflecting periods of liver dysfunction and impaired biliary secretion of metabolites. While the majority of data collected in this study suggested assay differences in adult kidney recipients were minimal, findings of ELISA dosage underpredictions of up to 25% in the long term must be investigated further.

A uniform white-noise model for fixed-point roundoff errors in digital systems

Fixed-point roundoff noise in digital implementation of linear systems arises due to overflow, quantization of coefficients and input signals, and arithmetical errors. In uniform white-noise models, the last two types of roundoff errors are regarded as uniformly distributed independent random vectors on cubes of suitable size. For input signal quantization errors, the heuristic model is justified by a quantization theorem, which cannot be directly applied to arithmetical errors due to the complicated input-dependence of errors. The complete uniform white-noise model is shown to be valid in the sense of weak convergence of probabilistic measures as the lattice step tends to zero if the matrices of realization of the system in the state space satisfy certain nonresonance conditions and the finite-dimensional distributions of the input signal are absolutely continuous.

Leaf water potential and osmotic adjustment as physiological traits to improve drought tolerance in rice

A sample of recombinant inbred lines (RILs) was derived from a bi-parental cross between Lemont and BK88-BR6, which contrasted in maintenance of leaf water potential (LWP) and expression of osmotic adjustment (OA). Genotypic variation for LWP and OA, and their associations with yield determination under water deficit, was studied in a series of five field experiments. Genotypic variation in the maintenance of high LWP was consistent across water deficit experiments. In the determination of genotypic variation in the maintenance of LWP, rate of water deficit was not an important factor influencing ranking, but degree of water deficit, and phenological development stage were important, particularly around heading. Genotypic variation in expression of OA was also observed under water deficits during both vegetative and flowering stages but ranking was inconsistent across experiments. This was in part because of large experimental errors associated with its measurement, but also because the expression of OA was associated with extent of decline of LWP. The relationship between OA and LWP was demonstrated when data were combined across experiments for vegetative and flowering stages. Under water-limited conditions around flowering, grain yield reduction was mainly due to a increased spikelet sterility. Variation in OA was not related to grain yield nor yield components. There were however, negative phenotypic and genetic correlations between LWP and percentage spikelet sterility measured at flowering stage on panicles at the same development stage during a water deficit treatment. This suggests that traits contributing to the maintenance of high LWP minimized the effects of water deficit on spikelet sterility and consequently grain yield. (C) 2002 Elsevier Science B.V. All rights reserved.

Fas ligand and tumour counter-attack in colorectal cancer stratified according to microsatellite instability status

Expression of membrane-bound Fas ligand (FasL) by colorectal cancer cells may allow the development of an immune-privileged site by eliminating incoming tumour-infiltrating lymphocytes (TILs) in a Fas-mediated counter-attack. Sporadic colorectal cancer can be subdivided into three groups based on the level of DNA microsatellite instability (NISI). High-level NISI (NISI-High) is characterized by the presence of TILs and a favourable prognosis, while microsatellite-stable (MSS) cancers are TIL-deficient and low-level MSI (MSI-Low) is associated with an intermediate TIL density. The purpose of this study was to establish the relationship between MSI status and FasL expression in primary colorectal adenocarcinoma. Using immunohistochemistry and a selected series of 101 cancers previously classified as 31 MSI-High, 30 NISI-Low, and 40 MISS, the present study sought to confirm the hypothesis that increased TIL density in MSI-High cancers is associated with low or absent membrane-bound FasL expression, while increased FasL in MSS cancers allows the killing of host TILs. TUNEL/CD3 double staining was also used to determine whether MSS cancers contain higher numbers of apoptotic TILs in vivo than MSI-High or MSI-Low cancers. Contrary to the initial hypothesis, it was found that MSI-High cancers were associated with higher FasL expression (p = 0.04) and a stronger intensity of FasL staining (p = 0.007). In addition, mucinous carcinomas were independently characterized by increased FasL expression (p = 0.03) and staining intensity (p = 0.0005). Higher FasL expression and staining intensity did not correlate with reduced TIL density or increased numbers of apoptotic TILs. However, consistent with the hypothesis that curtailment of the host anti-tumour immune response contributes to the poor prognosis in MSS cancers, it was found that apoptotic TILs were most abundant in MSS carcinomas and metastatic Dukes' stage C or D tumours (p = 0.004; p = 0.046 respectively). This study therefore suggests that MSS colorectal cancers are killing incoming TILs in an effective tumour counter-attack, but apparently not via membrane-bound FasL. Copyright (C) 2003 John Wiley Sons, Ltd.

Synthesis, stability, antiviral activity, and protease-bound structures of substrate-mimicking constrained macrocyclic inhibitors of HIV-1 protease

Three new peptidomimetics (1-3) have been developed with highly stable and conformationally constrained macrocyclic components that replace tripeptide segments of protease substrates. Each compound inhibits both HIV-1 protease and viral replication (HIV-I, HIV-2) at nanomolar concentrations without cytotoxicity to uninfected cells below 10 mu M. Their activities against HIV-1 protease (K-i 1.7 nM (1), 0.6 nM (2), 0.3 nM (3)) are 1-2 orders of magnitude greater than their antiviral potencies against HIV-1-infected primary peripheral blood mononuclear cells (IC50 45 nM (1), 56 nM (2), 95 nM (3)) or HIV-1-infected MT2 cells (IC50 90 nM (1), 60 nM (2)), suggesting suboptimal cellular uptake. However their antiviral potencies are similar to those of indinavir and amprenavir under identical conditions. There were significant differences in their capacities to inhibit the replication of HIV-1 and HIV-2 in infected MT2 cells, 1 being ineffective against HIV-2 while 2 was equally effective against both virus types. Evidence is presented that 1 and 2 inhibit cleavage of the HIV-1 structural protein precursor Pr55(gag) to p24 in virions derived from chronically infected cells, consistent with inhibition of the viral protease in cells. Crystal structures refined to 1.75 Angstrom (1) and 1.85 Angstrom (2) for two of the macrocyclic inhibitors bound to HIV-1 protease establish structural mimicry of the tripeptides that the cycles were designed to imitate. Structural comparisons between protease-bound macrocyclic inhibitors, VX478 (amprenavir), and L-735,524 (indinavir) show that their common acyclic components share the same space in the active site of the enzyme and make identical interactions with enzyme residues. This substrate-mimicking minimalist approach to drug design could have benefits in the context of viral resistance, since mutations which induce inhibitor resistance may also be those which prevent substrate processing.

An approach to verifying and debugging simulation models governed by ordinary differential equations: Part 1. Methodology for residual generation

For dynamic simulations to be credible, verification of the computer code must be an integral part of the modelling process. This two-part paper describes a novel approach to verification through program testing and debugging. In Part 1, a methodology is presented for detecting and isolating coding errors using back-to-back testing. Residuals are generated by comparing the output of two independent implementations, in response to identical inputs. The key feature of the methodology is that a specially modified observer is created using one of the implementations, so as to impose an error-dependent structure on these residuals. Each error can be associated with a fixed and known subspace, permitting errors to be isolated to specific equations in the code. It is shown that the geometric properties extend to multiple errors in either one of the two implementations. Copyright (C) 2003 John Wiley Sons, Ltd.

An approach to verifying and debugging simulation models governed by ordinary differential equations: Part 2. Residuals analysis and a case study

In Part 1 of this paper a methodology for back-to-back testing of simulation software was described. Residuals with error-dependent geometric properties were generated. A set of potential coding errors was enumerated, along with a corresponding set of feature matrices, which describe the geometric properties imposed on the residuals by each of the errors. In this part of the paper, an algorithm is developed to isolate the coding errors present by analysing the residuals. A set of errors is isolated when the subspace spanned by their combined feature matrices corresponds to that of the residuals. Individual feature matrices are compared to the residuals and classified as 'definite', 'possible' or 'impossible'. The status of 'possible' errors is resolved using a dynamic subset testing algorithm. To demonstrate and validate the testing methodology presented in Part 1 and the isolation algorithm presented in Part 2, a case study is presented using a model for biological wastewater treatment. Both single and simultaneous errors that are deliberately introduced into the simulation code are correctly detected and isolated. Copyright (C) 2003 John Wiley Sons, Ltd.