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Biotech / Medical : SYNTHETECH - NZYM
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To: tuck who wrote (339)9/25/2000 11:46:32 PM
From: keokalani'nui   of 372
 
tuck--thank you for sharing that report and your knowledge.

My concern has less to do with the legitimacy of its drug construction/manufacturing activities or even the greater market opportunity, but more with real revenue potential. The only big-pharma development project I remember was taken back from nzym to be sourced in-house. Even the manufacturing contract nzym discloses in its 10K (entered into in 1990) is renewable year-to-year. Though cancellation invokes a product royalty to nzym, I'm not optimistic it's very high. We're talking commodity manufacturing, not drug discovery.

Ask yourself...would you persuade your EVP Mfg/R&D (or risk your career) to marry nzym as the primary source for a human therapeutic? Sure, they can respond quickly in small amounts for pre- and clinical trials, but if the drug hits big would not nzym be best as a second source? I worry that few of these customers really plan on making nzym their very own Berlex.

I agree with you that nzym has a viable business. I doubly agree with every one who has pointed out its financial strength and reasonable valuation. But if we are taking biotech risks with the pipeline, we need to see that the rewards are commensurate. It is just no longer that clear to me anymore. But then I'm not exactly Bernard Baruch.

--Wilder
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