Hi Luis,
I have been a long term investor in Lidak (as have you and others) and have experienced the many ups and downs in the stock price. I have remained loyal due to confidence in Dr. Katz (his resume is excellent) and his science - Lidakol and much more. The recently announced P values for Lidakol in Phase 3 were great - putting Lidakol way ahead of Denavir. (Lidakol was tested from the beginning of herpes symptoms; Denavir from the start of a blister stage, normally 1 1/2 to 2 days later). Shaman has stopped testing of Virand. A letter of approval from the FDA for commercialization of Lidakol should come within a few months.
This is the way I see the present situation:
Dr. Katz made a significant sacrifice by selling 1/3 of his holdings to Health Med at about $4.00/share. He receives no payment for two years. By then the price should be much higher, as before. Dr. Katz must have had confidence in Health Med. I believe that Dr. Katz made this deal with Health Med in order to obtain their financing. Remember that, unlike the earlier two financings, this will not delute our holdings. With Health Med's money, Lidak will be able to manufacture and market Lidakol immediately after approval, rather than just receive royalties from a drug firm such as BMY. In addition, Dr. Katz will be able to proceed with clinical testing of his other science - LMI, Kaposi's, wound and burn healing, IgE, etc.
Lidak's board has a fiduciary responsibility to consider Health Med's offer, but the recent announcements seem to indicate that they are taking their time. This may be that under Health Med's proposal they will lose their directorships. You have probably noted in the 10K s that, unlike Dr. Katz - and now Health Med, the members of the Board have little or no investment in Lidak. They only hold options (with little or no risk), which they have probably received for attendance at board meetings. In fact, according to the Vicker's insider report, two directors exercised options and immediately sold at $5 - $6 / share in February 1996, just weeks prior to the announcement of the failed phase 3.
I am maintaining my confidence in Dr. Katz, and as I can, will buy more shares. After all this time, positive resolution should come very soon.
Will |
