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Biotech / Medical : CEPH - CEPHALON
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To: Icebrg who wrote (37)6/7/2003 3:32:31 PM
From: NeuroInvestment   of 109
 
Erik:

Thank you for the very concise summary of the CEPH debt. I rather doubt that the majority of observers are focusing their concern on the billion+ debt due several years down the road. My guess is that there is some trepidation regarding what they will do with the billion + in cash they now have available. I do agree they are amassing cash for an acquisition. But M&A is often/usually not viewed as immediately benefiting the acquirer--as exemplified by the case of the now-moot merger between NPS and Enzon. While CEPH could add something to CNS, pain, or oncology, I would bet on the latter. It is what they wanted to do with SIRtex, give the Actiq reps something else to sell, and that will likely still be their emphasis. I'd rather see them do something creative on the CNS end, but Baldino is now hemmed in by the illusion fostered on the Street that missing analyst consensus estimates by a penny is some type of catastrophe. It is almost impossible to find a useful CNS program for sale that is going to add to the bottom line in the immediate future. Growth strategies thus are held hostage to the falsehood that shareholder value can be accurately appraised by each quarter's results.

Anyways, I think that companies in a position to raise capital in up cycles such as this have to do so--failures of omission have come back to haunt many. This applies to NBIX as well.

Harry Tracy

NeuroInvestment
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