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Biotech / Medical : Paracelsian Inc (PRLN)

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To: Richard Mazzarella who wrote (1719)2/14/1997 7:10:00 PM
From: John H. Farro   of 4342
 
Richard, I'm not at all sure that you are calculating the profit correctly. AndroVir and AndroCar may bring $2.8 million profit into the company, but if the company is spending $3 million a year it will be operating at a $200 thousand loss. It all depends on whether the costs Paracelsian has figured into their basis for AndroVir and AndroCar include overhead costs for research and running the company or whether the costs for these products only reflect the direct costs for producing AndroVir and AndroCar. I can not tell based on the information given, though I suspect they only include the direct costs. Still, I think PRLN should be trading higher than it is now in anticipation of future profitability. If they can reach their sales goals in a year they will be poised to make big profits in 1998.

I think there is a possibility that the ad campaing may help the stock price. Quite truthfully, almost no one has heard of PRLN. An ad campaign may increase their visibility.

But the single most important factor that might launch PRLN's stock price is probably the appointment of a credible CEO to lead the company in its future endeavors. I have a feeling some of the big investing houses may be holding back in investing until Paracelsian gets a new leader.

Robin
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