GENZYME - THE KING OF THE BIOTECHS Message Board

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Biotech / Medical : GENZYME - THE KING OF THE BIOTECHS

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To: Andreas Helke who wrote (308)	7/28/1998 12:50:00 AM
From: Lighthouse	Read Replies (2) of 410

O.K. I'm game to talk about Genzyme. Please forgive the long rant. It really is meant to stimulate intelligent discourse. A good quarter from the company as well as possible approval for two new therapeutics by year end 98. Thyrogen ($50-$75 M) and Renagel ($100 M + potential) are exactly what the Street wants to see (high margin, protected sales/profits). I like the BioMarin and Pharming deals. As Vector 1 said lysomal disorders are their niche and the specialty sales force in this area is the only long term competitive advantage for the company! Also the A-III trials with GZTC should be done sometime in the next few years and all indications look good. Stack it end to end and you have multiple product rollouts over the next three years. Not bad. Orphan status on several to boot. Competition on Gaucher's is a long way off. I have read two different reports on the quarter and they both peg Seprafilm's sales at $3.5 Million for the quarter. This product is lagging badly. We will have to wait several years before the long term cost effectiveness studies are completed. Until then . . . . perpetual frustration. Adoption cycles are always difficult for surgeons. This one might be doubly hard. Deknatel is a long term loser. Sorry to say this so bluntly, but it is frustrating to watch management pour more time and money into this division. Aside from poor market share positions, vis-a-vis weak sales force, commoditized products (you want to go fight it out solely by pricing with USS and JNJ? Are they nuts?) and no large GPO contracts - why not play here? Combining DSP with Seprafilm was the rationale for the DSP purchase. It did not work. I would like to see them move on, but at the anaylst meeting in May the company mentioned that this area was ripe for further investment. The recent convertible deal gives them some cash. Ever heard of the "Bladder Theory of Cash Management?" The more you have the more you piss it away. Watch out here. I have not read any discussion about GENZ's creative financing deal with GENZL. A sale-lease back of the GENZL facility? Frankly this is a thinly veiled life line to the GENZL divison and the discount rate is not nearly high enough. GENZ has better things to do with its money than handing it to GENZL at a lease back rate probably under 10%. I suggest 35% after GENZL's latest quarterly numbers. This is venture capital investing IMHO and the sharks usually look for 30-40% per year. So as not to sound overly negative I am a recent shareholder and not a short. Man this is way too long - Sorry to everyone. Input would be greatly appreciated. ;-) P.S. Does anyone else run a DCF sheet on GENZ?

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