Dear Richard,
I agree with you about not wanting to take things in a positive way just because one wishes the stock would go up.
That said, however, I'm not sure of the importance as a single number of the number of prescriptions written because during the recent conference call the CFO emphasized that drugs of these types are launched by aggressive sampling -- free samples, giveaways, designed to get the product in the target group of doctors' hands. It's a reason why the initial sales figures will be skewed -- we pumped up the distribution chain in June and are also spreading the drug through samples, so the first quarter the drug is available will probably
show very uneven revenue figures.
More important to me is market share numbers because they show momentum and can be quantified on an annualized basis. These seemed right away to be ok and the CFO had said they were building week by week. In the first month alone, Lotemax had captured a 2% share and Alrex a 4% share. If, two months later, after a full quarter on the market, these figures have doubled, we now have a market share that will yield $4.8 million/year in revenues. With yearly cash burn at $6 million, this is a significant step forward and the comment that the CFO made on the call about being able to make existing cash and incoming cash last past the first quarter of 1999 seems probable.
As for the stock price, if you compare PARS with other biotechs before announcements are made, the current activity seems normal. Lots of drugs don't make it past this point of development and some people understandably step away until results are announced.
My sources in Israel continue to tell me that management is very upbeat about the trial. Perhaps mortality rates have continued to stay very good.
Regards,
Ariella |
