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Biotech / Medical : GENZYME - THE KING OF THE BIOTECHS
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To: MCorbley who wrote (310)7/28/1998 1:36:00 PM
From: Lighthouse  Read Replies (1) of 410
 
Thanks for the reply. The following is offered as a sounding board and not guaranteed to be accurate truthful or helpful. Investing can be dangerous to your financial health - BE CAREFUL - especially of unknown posters. ;-)

Most analysts have dialed in Seprafilm sales of $150-$200 million annual revenue in the 2001-2003 time frame. Current run rate is less than $15 million. The long term studies of cost effectivness are the major way Seprafilm will hit these numbers, if they hit it at all. The numbers I have seen are a prevelance of abdominal adhesions in apx. 2.5% of procedures. (Anyone else have a number here). Many of these complications require repeat surgeries and are expensive. The theory is that Seprafilm (two to three sheets @$300) used in every procedure will pay for itself. So far the dogs are not eating the dog food. Long term studies will take several years and I believe that many forecasters are unsure of their out year numbers. Hence a quality of future earnings concern.

But now we have several new therapeutic compounds coming on line. The quality of these earnings are much better than Seprafilms and the discount rates are lower as well. Wall Street will give a higher p/e to these earnings. (At least in theory).

What would drive your abdominal surgeon to use Seprafilm?

At this point I have not included in my estimates material upside in Seprafilm sales. If it happens - it's gravy. My investment in GENZ is predicated on the therapuetic pipeline.

Regards,
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