Agouron Pharmaceuticals (AGPH) Message Board

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Biotech / Medical : Agouron Pharmaceuticals (AGPH)

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To: George T. Santamaria who wrote (4350)	5/20/1998 11:17:00 AM
From: tommysdad	of 6136

You asked for a comment on stock option plans. Specifically, for biotechs, if you don't have a generous stock option plan you cannot attract talent. Period. Why? Because Big Pharma can throw lots and lots of money at talented scientists in the form of signing bonuses ($10K is not unusual for a medicinal chemist, for example), matching 401-K plans (1:1 up to 5% is typical), housing allowances (paying the points and even a percent or two on the loan, maybe). Being cash poor but stock rich, Biotechs cannot do this. What they can do is offer a longer-term, potentially larger payoff in the form of stock options. If you want the kind of talent that discovered AG3340 and developed Viracept, you need to pay for it in some way -- Biotechs are forced to choose options to keep their burn rate low. I am not familiar with AGPH's stock option plan in particular, except that is not overly generous compared to other Biotechs. But it is not uncommon for stock options to have a 5-6 year lifetime. Could simply be a lot of AGPH employee options are expiring now.

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