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Biotech / Medical : VD's Model Portfolio & Discussion Thread

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To: Rocketman who wrote (5029)	5/30/1998 1:21:00 PM
From: Vector1	Read Replies (1) of 9719

Rman, I think we should cover. I admit I am chicken sh_t when it comes to shorts but this one scares me on the upside short term. If we want to play for the long ball I have an idea which I will talk to you about later. I think ICOS has a decent chance of a big run. If it runs to $28-30 with all deference to Rick its a nice short because with a major upcoming dilutive event on the way it will take a nose dive at some point. The company is at least 3 years from substantial revenues and will need to add a sales and marketing infrastructure ( they say they want to be an intergrated pharma). Creating the infrastructure before revs hit will be quite expensive and suck cash like a vacuum on steroids. They are going to have to raise a lot of money which means more shares and they already have almost 40million not including warrants and options. A $30 per share price with an additional 10m shares translates into a $1.5b market cap. When you consider that revs are far away, there is at least 1 competing product with a dominant market position by a major pharma powerhouse and the 30-40% discounts biotech are geting on future earnings a $30 per share price will not be sustainable. V1

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