Peter,
Perceptive points, all. I have to go back and get my arms around the stepped hedge that was put into place to understand how the different strikes and market prices play out in terms of net cost and dilution.
On the downside (Monday opening hasn't even arrived and I'm already raining on the parade), I guess there are the following:
- management's irrational exuberance (R&D spend) (maybe Soltara really did give them religion)
- Xopenex challenge--what is your assessment of probability?
- market swoon and valuation
- failure of drug candidates
- politically motivated assault on drug pricing* and facilitation of entrance of generics into the market
- Estorra market share against existing and new competition
Corrigan seems to be a real asset. A steely, steady, no-nonsense hand working among drug development, science and regulatory affairs can't hurt.
* (At dinner with friends last night, there was a heated discussion about our system of meting out medical care: those who can afford it do quite nicely (availing themselves of the benefits of arguably the most cutting edge bio-medical sector in the world) vs. the inequitable distribution of care to the rest of us. Our hosts: the husband's mother, who has outlived the "system's" willingness to fund hospitalization for advanced Parkinson's (she has survived a good year beyond the programmed end point) and the wife's niece, who is being refused care for autism and other conditions on the basis that the therapies proposed are "experimental". My wife works for an HMO--she was, of course, empathetic, but also observed that she is privy to impassioned screaming matches between CMO's and assistant CMO's and nurses who argue impassionedly about whether a given treatment is justified or should be withheld. I chimed in with the conundrum between the insane costs of some treatments (especially oncological) vs. the absence of incentivation that would result if pharma and BT could not recover (and then some) their sunk costs in successful therapeutics as well as those that never reach application status. Will we reach the point of caps on gross margin?
As we boomers absorb more and more of the care, and account for more and more of the expense, of our health care system, can real reform be too far off? Not in this administration, but somewhere down the line.
In this sense, since SEPR is not, by and large, seeking marketing approval or R&D in critical care products, does that confer an advantage? Recall the discussion on this board regarding the allergy treatments, OTC and prescription.
quid
Peter--re ENRN--what made the "toxic convert" analogs so insidious was that they worked their magical value destroying magic from afar, through undisclosed spv's whose capitalization and transactions values were premised on the value of ENRN stock. I hope to see Skilling trudge down his own, personal Calvary. |
