Nice to see I'm not the only one here: When
you start talking to yourself...you worry that
you're crazy{;-0} and that everybody else has
sold out and moved on.
Right now the biotech stocks are being treated
as if they are the same as the emerging markets.
This suggests to me, that if you're willing to
hold things for a few years, this could be the
best firesales we ever see in some of the biotechs
(the best time to be purchasing stocks being when
there is a maximum pessimism and fear in place).
I don't know if there is much of a chance of the
Ariad warrants doing anything but go to zero, but
at roughly twice book, as they say, the stock seems
cheap.
If we see the big indexes fall apart, say the dow
falls below 8000, I may even start to pull money
out of my pocket to pick up some things. I suspect
if we get to that point, you'll see the big pharmas
doing some shopping too. HOE for instance has to put
a certain amount of money into buying Ariad preferred
b shares (not sure they actually exist at the moment
tho--I can't get a quote, maybe somebody can explain
that to me, are these the same as the common, aria?),
at some point I don't see why they might not just sop
up the whole thing.
here is the text of the hoe obligation from the last
quarterly
Pursuant to the 1997 HMR Genomics Agreement, on March 18, 1997, HMR purchased 2,526,316 shares of the Company's series B preferred stock for $24,000,000. During the period from 1999 to 2002, to fund its commitment to the Genomics Center, the Company may, at its option, require HMR to make additional purchases of up to $25,000,000 of series B preferred stock at purchase prices based on a premium to the market price of the common stock at the time of each subsequent purchase (unless the market price of the common stock exceeds a predetermined ceiling, in which case the purchase price will be equal to the market price). Should ARIAD and HMR determine that the Genomics Center requires funds in excess of those committed, ARIAD may fund its share of the excess through a loan facility made available by HMR. Funds borrowed by ARIAD pursuant to such loan facility, if any, will bear interest at the ninety (90) day LIBOR rate plus 0.25% and are repayable by 2003 in cash or series B preferred stock, at the Company's option.
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