Roger's 1997 Short Picks Message Board

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Strategies & Market Trends : Roger's 1997 Short Picks

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To: Don Kelly who wrote (8293)	12/13/1997 2:23:00 PM
From: Bill Wexler	of 9285

Don't be misled by the Schering Plough deal. Don't ever put too much importance on "strategic alliances" and "licensing agreements". Particularly when it comes to drug companies. Vivus had plenty of these agreements and analyst upgrades before the stock crumpled. Large drug companies often throw some cash at development stage firms in the hopes that one of them may produce a blockbuster. These licensing deals come a dime a dozen. In fact, if a company touts a licensing deal a bit too loudly in a press release before getting FDA approval, then this is usually a good indication that they are more interested in artificially propping up their stock price. A good analogy would be Intel investing in young tech firms...even though many will go nowhere. It is nothing for a company like Schering-Plough or Abbot to invest $10 million here and there. I would bet that in many cases, scientists inside the larger companies snicker when they find out what the suits just wasted money on.

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