Sepracor-Looks very promising Message Board

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Biotech / Medical : Sepracor-Looks very promising

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To: David Howe who wrote (1154)	9/14/1998 9:39:00 PM
From: David Howe	Read Replies (2) of 10280

The following post was in response to a short on the Yahoo board. There are a few shorts over there and they all apparently have shorted SEPR because it has "gone up and must come down". None of them have a clue. I'm not saying that there isn't a chance that SEPR's stock price could fall a little, what I am saying is that none of the shorts on Yahoo have a clue...period. ------------- You are short a stock and you ask the questions that you ask? A bit strange I'd say. The questions you ask have answers that are in black and white if you just look. There are risks in investing in companies like SEPR, but, they are not the risks that you mention in your post. << How soon will can they turn a profit? How much profit can they turn? >> The average estimate for 2001 earnings are for $6 per share. Go with a PE of 30 and you get a stock price of 180. Earnings for 2002 and 2003 are much higher. These earnings projections are based on deals that SEPR has in hand at this time. They don't include the multitude of deals that SEPR will announce between now and then. << At some point they are going to be forced to start borrowing, especially in this market once the stock price falls substantially. >> Why borrow? SEPR has $250 million in cash. They have large pharmas like Jannsen agreeing to pay all expenses required to bring the drugs to market. They have strong royalty contracts. They have positive cash flow locked in. Any surplus funds will go towards R&D. << Aren't owners tempted to take profits? >> Apparently not. Check out the SEC filings. Non of the SEPR management has been selling their shares. In a recent conference call they were asked how they would protect against a buyout. They said that they would not be opposed to a buyout (they are shareholders and would profit from a buyout). They did say that they hoped it happened later rather than sooner because the company "is worth considerably more than it's current value". It was at 54 at the time. The conference call was worth a listen. Someone invested in SEPR (short or long) should have listened to it. If one pharma bids for SEPR the others could counter with higher bids. No pharma is going to want it's competitor to suddenly have all of SEPR's pipeline added to it's own pipeline. SEPR's pipeline is larger than Pfizer's current pipeline. We are not talking about a flash in the pan here. SEPR is a monster in the making. Dave

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