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Technology Stocks : Tseng Lab on the move?
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To: Urlman who wrote (239)11/2/1998 2:52:00 PM
From: AJ Berger  Read Replies (3) of 251
 
Longs & Shorts Must Read This ASAP

according to a source underwriter of the CLPA IPO,
the IPO was CANCELLED 10/30 due to weak
"market conditions". Cell Pathways managed
to raise $15-20mil from venture capitalists,
and will forgo this IPO (again) for the time being.

This does not throw their purchase of TSNG
in doubt yet, it just makes those expecting
TSNG to be worth 1/3 of a $30 stock out of
the ball park. TSNG will likely simmer down
to the $4 range it was before Cell Pathways
came into the picture in early October, and
will not pick up again until the buyout is
clear, or good Trial III news comes out. I
don't expect TSNG to command much premium
unless they pospone the buyout long enough
for a positive Trial III result. Either way
the Shorts are RIGHT down to the $4 range,
and Longs should take profits unless they
are holding through the FDA window of approval.

How you can expect Cell Pathways to buy TSNG
is a mystery to me since it's improbable that
a company with a simlar market cap can buy
an equally valued company without the gimmick
of an well marketed IPO. TSNG may be better off
getting their own venture capitol or issuing
more share to keep themselves alive long enough
in the hopes of commanding a much higher premium
from another suitor when the FDA reports come.
Or, TSNG may have low confidence in quick
approval, and hedge their bets by cashing
out to Cell Pathways, with still better
price per share then when the Tseng family
was dumping back in December'97.
Right now it's a crap shoot, as are most small
young, one horse pharmacutical companies.
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