Hi Peter!
I came here to do a little catch-up on ARIA and upon reading your posts you show a great understanding of biotech. As I mentioned in my reply at the other company we were discussing, I don't want to get too bogged down in biotech lingo when I am primarily interested in price appreciation.
I got a return call from David O'Reilly, Director of Corporate Development at ARIA and he was very helpful in answering the questions I thought were important. A synopsis as follows:
1. Dr. Berger formed his mgmt and research team primarily from those who worked with him at Centacor. Today, five years later, that same team is in place, which shows a very stable organization compared to most in this field of biotech;
2. A company can have the greatest research facility in the world but they eventuallly have to make money before their research money dries up and they need to show a profit for their stocks to rise. Initially, their agreement with HMR didn't seem to offer much for ARIA even if they hit a super drug since HMR has the rights to that drug. However, they have several options available to capitalize on successfully developed drugs.
a.Royalties -- any drug that HMR feels has a market potential of $400 million or more, HMR markets and sells but then pays a very handsome roayalty to ARIA. The rate is much higher than the industry standard;
b. Options -- for any drug HMR does not market due to small market potential (maybe only $150 million to $250 million), ARIA can co-market and commercialize on their own;
c. 50/50 Joint Venture -- this is the joint venture with HMR re gene research which you have posted a few replies back. Anything discovered here will be marketed and sold jointly, even if it for smaller niche markets.
So, what does the company see as important goals to create a significant rise in their stocks within the next 12 months?
-- some of their discoveries need to move to the clinical trials stage. There are several they are preparing expecting to be filed by the end of the year;
-- continue to arrange strategic alliances with other corporations to decrease the risk of financial drain of R & D.
What does this mean for investment potential? IMHO, the stocks will continue to evaluate upwards, maybe to 12, with spurts up or down but generally it will be a long term position. Watch closely at the year end for news re clinical trials and new financing alliances. If the trading volume shoots up 200%-400% over their normal be prepared to jump in!
I look forward to your continued posts.
Arland |
