But, Rick, hold on before you burnish that halo. : )
I don't agree with you on GNE or CHIR, and don't like either one of them as a model. I don't even like the IMNX model, though it's turned out well.
Somehow these guys who want to become FIPCOs (still a worthy goal, but very, very hard to do) have to raise enough capital over a long enough period of time to get to the point where they have multiple products on the market and a robust pipeline of future products.
Everyone has to bite the bullet and give up things they don't want to give up in order to get the financing and partnering they need to get there.
GNE never was able to run like a business ... it ran like a research institute pursuing dozens of interesting projects of limited commercial value. What a lost opportunity. When they ran into problems with TPA, they had no choice but sell their soul to Roche. They've straighthened out their management issues, and they have an excellent pipeline, but their stock is a bond. No biotech or even pharma upside for the equity holders.
CHIR is an enigma. I think it will sell for $20 a share into the next millenium (yes, I do mean year 3000). I'm just kidding of course, but there's no evidence of the kind of ruthless discipline towards what business activities to pursue that Rathmann employed at AMGN, and of course AMGN was lucky.
Speaking of lucky, IMNX's dear friends and 53% owner AHP tried to buy them out at a $1 or $2 premium per share not too long ago. Nice corporate partner, huh. Fortunately for IMNX and the IMNX equity holders, Fritzky (sp?) knew what they had Enbrel, and knew he would be able to demonstrate that with clinical results in not too many months ... so it was easy for him and the IMNX board to stand firm, and of course IMNX's stock has appreciated 500% since then.
I still think AGPH is better off by not signing a 49-51% deal with a big pharma. They need to focus with laser intensity on their task at hand, ruthlessly control costs and terminate or deep freeze programs that aren't promising, stay the (remarkable) course with Viracept ... within a few quarters the shorts won't have a leg to stand on, unless they want to continue to argue the same points against a $1B WW sales product, and turn in some exceptional clinical results with either 1153, 3340, Remune (or more than one of them) and produce some stellar pre-clinicals in HCV and 7088.
They can't control the stock price, and shouldn't try. The stock will reflect the underlying value when the story is more clear on Wall Street, and it may take a quarter or two more to get there.
They have the cash and cash flow to pull this off. They are trading a year's earnings for 15 years of corporate growth. It's a good trade-off. But they've got to tighten down on spending if they are going to do this. Good companies start requisitioning pencils for a quarter or two to send a message.
Peter |
