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Biotech / Medical : Cell Genesys (CEGE)
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To: Ken Reidy who wrote (657)12/19/1999 10:32:00 PM
From: Mark Bong  Read Replies (1) of 1298
 
Ken, Peter's comments are well worth listening to. I posted my calculations because I think that it is important to understand the financial valuations based upon the new realities, mainly that the huge run up of ABGX has altered the valuation of CEGE rather dramatically. With the volatility of ABGX, it would be very hard to assign a formula to the current deal with GENZ if there were to be a renegotiation of their deal now.

However, I strongly believe that the ABGX valuations will require action by CEGE to enhance their share price above the $10 level that is the basis of the deal with GENZ. With a current $11 stock price, the market is also saying that it believes that this deal will either be unwound or renegotiated. Of course, ABGX volatility is a real unknown right now, but I don't see any reasonable circumstance where ABGX will go back to $40, so something has to give. I do own CEGE at $9, and I feel that I will see good appreciation, although I would be very surprised if the valuation went up as high as $18. It should be interesting to see how GENZ, ABGX and CEGE work this one out. It might even be possible to see AGBX take over CEGE to control their stock and then sell the unwanted pieces to GENZ. There is a lot of negotiating ahead before this deal is done.
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