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Biotech / Medical : VD's Model Portfolio & Discussion Thread

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To: Robert K. who wrote (6329)	1/18/1999 10:51:00 AM
From: Biomaven	Read Replies (1) of 9719

Robert K.: SEPR's $500m in cash is derived from convertible debentures, which only get converted if the stock price remains high. So it doesn't really provide any floor to the stock price at all. I have no idea how low it could go in a market crash or if there were bad news. SEPR's biggest risk has always been some sort of attack on its patents. I have always thought this unlikely, and the risk has steadily been decreasing. However you never know whether some Naderite group might sue charging that use patents on metabolites and chiral versions are an unlawful attempt to extend the life of the patents. SEPR is very much not a one-product company, and so bad news on any one product/licensing agreement, which is of course always possible, should have a steadily decreasing effect as its price. Thus a bad outcome on its patent interference arbitration on Allegra might have been devastating a year ago, but will have much less impact now (and might even create a buying opportunity). Once the revenues really start to flow in the 2001 and on timeframe, SEPR is going to look like a (mini) big Pharma, with a pipeline to match. Peter

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