SGNC... per my conference call that took place on 7/8/98 around 6pm central time to 7pm..
I may have some errors in this as happens when you take notes while you're talking.
Anything I write should be checked against the company.
Since I was aware that ALOT of the tecnological questions have been talked about at length on this thread and I'm sure that many questions are going to be answered in the 11page questionnaire given to Dr. Drees at last week's meeting with some brokers and investors, I wanted to focus more on him and how SGNC came about and where they stand now.
Dr. Drees has about 30years of experience in the marketplace. His background initially was that of a business analyst. He would go into companies, get rid of the waste and enhance the positives. Maximize profit, reduce exspenses right?? He was basically the guy you called when you wanted your company to be saved from bankruptcy
and instead turned around into a profitable, heathly organization. He at one point decided that it was time for him to move into the medical business. He felt as though the medical industry would offer greater rewards while providing strong stability. Heck we all get sick right? We all wanna live longer.. and we all know the high dollars that can be found funding medical operations/ventures.
He has a BA,MBNA,PHD Business Administration thus his career in helping develop companies that are dying.
He was President of 6 companies which included a division of Eli Lilly at one time.. He also found himself as an associate of Abbott in 1973.
Abbott was sold in the late 1970's to Green Cross (a Japanese firm) in which Dr Drees was made Director.. VERY prestigious for a Japanese company to take an outsider/American for the job. Dr Drees had found 3 Americans with a concept for a blood substitute technology of sorts who had not the means to produce or test it.. It's my understanding that Green Cross bought out the rights to their work and began working with it over a number of years. However, the CEO of Green Cross died (whom was interested in furthering ideas on this blood substitute product).. The new mgmt of Green Cross stepped in and decided they would have nothing to do with the product.
Dr Drees decided that is was time to branch off and form his own company and further this remarkable technology that he felt could truly save lives and create greate wealth in the years ahead. He started SGNC in 1994. Under this
he was able to get the first generation product of their blood substitute approved by the Japanese FDA. The ONLY person to ever do this with this type of product. Many many people were tested on this 1st gen. product with no
complications. However, do to a problem with paperwork through the Japanese FDA being handled improperly, SGNC was forced to refocus its efforts in the American market.
2 people currently operate SGNC.. Dr Drees and an assistant which is also very knowledgeable about the product and could handle any issues that arose should something happen to Dr Drees (that is my impression).
Now that SGNC is working towards an American FDA approval.. (and might I add that they have started over with a 2nd generation product this is VERY similar to the 1st.. but just a few minor changes to make it better), they have sought out to do animal testing with BATTELLE... the largest, oldest medical research lab in the world.
At first, I thought that BATTELLE had given SGNC the money to do this, but actually there are private investors that have funded SGNC now for some time and it is they who gave SGNC the money to pay BATTELLE to do continued research on PHER-02 (SGNC's 2nd generation product). These investors have of course been getting shares in return. But by far, we've seen no evidence of any stock dilution and surely without any revenues we have to understand that the company is going to have to survive on some shares for awhile. I see no problem with this
thus far.
Well, you would then say what's the big deal? If SGNC had to pay for it.. anyone could just pay for it.
NOT SO. You don't just walk into BATTELLE and say, "TEST THIS and MAKE IT BETTER!".
Dr Drees is truly a respected expert in this field now and has gained the respect of many organizations.
In 1994 BATTELLE was happy to accept the proposal, and I'm sure that they may indeed someday want a piece of the pie; although, Dr Drees said that BATTELLE rarely gets involved in the business aspect of things.. they usually just do the testing if they feel it's a worthwhile venture. However, SGNC and BATTELLE have an 'open agreement' meaning that they too wanted to be sure that if things looked good they might have a chance to get in on the action.
I would also like to add that when Dr. Drees left Green Cross, he made an effort to keep close contacts with those whom he felt would greatly benefit SGNC's efforts someday in the future. Many would have come over with him to start SGNC, but until just recently PHER-02 still remained a HIGHLY speculative investment of one's time, money and career. Still, there are risks, but things are beginning to fall into place. These other individuals will most likely
be called upon when animal testing is near completion. Dr Drees had mentioned that probably half a dozen individuals he has in mind to solicit someday in the future to come join SGNC when it has more testing and more support.
For now, Dr Drees that they MUST limit their overhead and thus 2 people are adequate. Keep in mind, dozens of people at BATTELLE are working with Dr Drees and his assistant daily on the phone and monthly in person to be sure that the testing is driven in a direction that would be
able to mold the product to Dr Drees' hopes for PHER-02 as he sees it.
In other words, BATTELLE is given guidelines of things that Dr Drees thinks the product could do or should do and they try and work within that. If new data comes up to support or deny what they have in mind for a finished product, then they make suggestions and converse and plan a new course.
SGNC currently has NO OPEN loans. Dr Drees himself has invested $2.5 MILLION dollars into SGNC.
Also, he mentioned that SGNC in 1994 had merged with a VERY small company that had been around for decades.
We didn't really get to touch on why they merged, but he did say that that company was pretty much dead along with
its stock price. The shares were transferred into SGNC stock and many of these people have waited 4 years for prices like we've seen recently on SGNC; thus, some of them are most likely selling. They probably have NO inclination of what SGNC is doing with PHER-02. They have their shares. They work elsewhere and one day recently they call their broker and "Hey, SGNC is up to 90cents? You wanna sell.. YEP!" And they do without even checking why. For all we know, some of these people may have sold only to be doing their DD now on where SGNC stands. You never know.
Anyway, SGNC currently stands at needing at least $4.5 million more dollars to continue its animal testing. Dr Drees told me that they have about 6months of animal testing already paid for or funded. After that, they will need more. Animal testing should take about 1 year.
He did say that the medical market would probably laugh if SGNC put out a press release stating,
"PHER-02 tests good on mice" and another PR stating "PHER-02 test good on rabbits"... and so on.
He said it just doesn't work that way. More than likely, he'll keep us up to date if ANY major developments take place during testing or if they lock in more funding in which they'll put out news.
I did explain to him that investors will need to be kept up to date and he said that he is fully aware that investors like to be communicated with regularly but that not to expect news every month. If something comes up they'll put out news.
Another thing I asked Dr Drees was, "How is it that so many other companies for yeras have ignored the kind of technology you're going after with PHER-02 only to try it other ways? Surely the whole market isn't wrong and you are the only one right".
His response was that the market has always viewed that their way was better and that Dr Drees' way 'could' work but wasn't worth pursuing. Basically he was told, "come back when you've got FDA approval".
But now what are we seeing? $150million dollar operations LOST by Baxter in a European testing site with a product and procedure that Dr Drees has been saying wouldn't work. And now Baxter admits, "Yep.. won't work".
Other companies are trying and failing as well. So who knows, Dr Drees just may be the only one right on this one.
After all, the whole world thought the Earth was flat at one time except for one person. He turned out right and didn't even have any shares of a stock for his efforts.
Dr Drees has said that at the beginning he did goto ALL the major pharmacy companies and try and solicit his ideas/product. None of them would bite. They all simply want to see more data. He has regular communications with some of these and I'm confident as testing continues that these pharms will be asking more and more questions.
Buyout for SGNC in 6months to 1 year continues to be VERY strong and LIKELY.
TOP DOG.. as well as myself remain VERY confident that this stock will reward greatly in the months ahead. We KNOW that some large institutions are looking into buying SGNC. Knowing when or what they will buy is anyone's guess. The story on this one is remarkable. There's always that risk that something could go wrong, that testing will reveal that PHER-02 just won't work. But let's NOT forget. Dr Drees holds the ONLY blood substitute product to have achieved FDA approval in Japan; he holds several patents, is working with BATTELLE, is in communications with BAXTER, ELI LILLY, BRISTOL MEYERS, JOHNSON & JOHNSON, etc. , has tested his first generation product on hundreds of people with no problems, and currently is developing his 2nd generation product PHER-02 which is much better.
Some people aren't looking for a VERY long term play. Some are looking for a 48hour double. Some may show more patience and be willing to wait a month. There are penny stocks all over that can move up VERY quickly.. but they can move down very quickly as well. It's truly wise to have a few stocks in one's portfolio that would be worth holding onto for a few years. Before you know it, testing will be completed with PHER-02 and things will be MUCH different and people could be saying, "I had a chance to buy in early on SGNC and didn't."
So IF you TRUST the DD and like the potential here of a product that could have a good portion of a $20 BILLION
market that's trading for pennies per share, consider picking up some shares and just sit on them and check on them weekly or monthly being sure to make sure there aren't any new, significant developments that one would need to know about. Hope this helps.. sorry not much new info to chew on.
Jim |
