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Biotech / Medical : A Biotech Bonanza!

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To: F. Jay Abella, III who wrote (29)	10/29/1997 12:30:00 PM
From: Giuseppe Scalamogna	Read Replies (2) of 64

FJA Your risk assessment is right on. They mitigate the risk through a three tier strategy with tier 1 being currently marketed generic and anticancers, tier 2 being Supergenerics and tier 3 being propietary new treatments such as those for obesity and RFS 2000. What does this tell me? Well it seems to indicate that the company prefers stability to blockbuster success although that may come along the way. Cash burn for the company is mitigated in a layer strategy which eventually will lead to profitability, I'm thinking in or about Q4 of 1998. Nipent will continue to produce operating revenues along with the anticancers from Barr and Immunex. I think that was and still is the primary focus of Tier 1. The company has gone through some equity financing but that will end very soon as the company pumps Extra formulations up to full scale and expands sales of Nipent. With achievement of tier 1 and tier 2 products, the company has diminished risk associated with tier 3 to a much more tolerable level. I do believe that with completion of tier 1 & 2, not only will the company be profitable but will be in a position to expend capital for their own manufacturing facilities by which they can tap into their proprietary fermentation process to expand margins on the pipeline of those products. You are right FJA, the management really does know the drug business and is tackling the biggest problem associated with it; risk. I will comment on Capital Structure soon. GS PS - In regards to the next company to present, I am not familiar with SunPharm but will be happy to take a look at it. When we begin discussion of SunPharm on Monday, November 10, 1997 we can present the next stock at that time, so everyone can be prepared to discuss after discussion of Sunpharm comes to an end.

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