I listened this morning with half an ear to the MLNM-presentation. I think Ken Bate is giving a very professional controller-like impression. I am sure they have never before had anyone like him in the organisation. Well Kailian then, but he left before he had time to leave a lasting impression on the company. Unless he was the one responsible for the de-construction of the old Cor-core.
The number one take-home message from the presentation is that MLNM is now striving to adjust the cost-structures to be in line with the expected 2006 revenue base. Rather than keeping the costs at current levels hoping to be hit by a jack-pot sometime in a distant future.
The R in R&D will be scaled down. Primarily because there is a feeling, that it will be more useful for the company's value creation to develop what they have already found among genes and targets, than to find even more targets, which they will not be able to afford to do anything about. The new buzzword seems instead to be "pathways". Going from genes/targets to biology and pathways signals a major shift and a certain degree of maturity in the company.
And there are again signals going out, that we should expect some pruning in the clinical development portfolio. We have heard that before, but so far seen very few indications, that this will indeed be the case. On the other hand we should expect to start to see drug candidates coming out of the Aventis/Millennium inflammation co-development venture.
Perhaps one could sum it up by suggesting, that Millennium is now trying to reshape itself as a commercial operation instead of being a typical biotech.
Perhaps one might finally conclude, that there appears to exist a certain degree of confidence in the organisation, that they will succeed in the restructuring activities. They have - which I see as a good sign - not used the possibilities offered by the convertible bond market. A market through which it seems to have been possible for almost anyone to raise new funds. MLNM would not have had any problems raising new funds, provided the terms were bad enough. But Bate is smart enough to realise that having too much unallocated funds slushing around is a good recipe for corporate disaster and shareholder losses.
Erik |
