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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: LLCF who wrote (147349)1/31/2002 8:40:22 AM
From: reaper  Read Replies (2) of 436258
 
<<INCY...what's the feeling?? >>

Deferred revenue has been falling, which is bad news for a subscription business (again, VERY broadly for a subscription business, BOOKINGS equals revenue + change in deferred; so if the change in deferred is negative that means bookings are less than P&L revenue, which means future P&L revenue will fall, not grow. one of the easiest negative trends to spot for balance sheet readers). The other bad thing is a huge increase in accounts receivable despite not much growth in revenue and falling deferred revenue; suggests that something untoward is going on wrt revenue recognition (please note, I am not accusing anybody of anything here; the balance sheet account suggests it, not me).

I actually sort of like the business as I think a lot of their patents will hold up and in "years and years" they will have a nice royalty stream from drugs that were discovered via the use of their IP. But you know as well as I do that drugs go from target identification to actual drug over the course of 6-10 years, so even as we sit in 2002 we STILL have a long time to wait for royalties to start rolling into INCY. Sub-$10 I'd actually take a flyer with the thought of holding on for 5-10 years.

I am also encouraged that they have finally buried the hatchet (after 5 years of lawsuits back and forth) with Affy. Don't know the new management yet, but frankly they couldn't be worse than the old management.

Cheers
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