Bloomberg is indicating that JNJ will buy Centocor shortly. As you are aware agouron was purchased recently by WLA. I am not one to invest based on buyout expectations, but many large pharma's have indicated a desire to acquire. ABT, PNU and recently WLA indicated a desire to buy 2 - 10 billion dollar comnpanies. Well IMO the list is nopt very long. IMNX, MEDI, GENZ, ELN, GNE (which Roche holds a June option at $82.5 on) and our own SEPR. Personnaly i wouldn't touch GENZ or ELN due to accounting methods. I have always felt that SEPR wouldn't make it through 1999 as an independent company. The recent push back of substantial earnings from 2002 to 2003 may delay this 1 year.
On a separate note, I like many of you have thought long and hard about SEPR's prospects. I have been challenging every assumption trying to find holes that would justify the stock activity. I have come to the following conclusions and would be interested in your feedback.
1) Most if not all of SEPR product pipeline will get FDA approval. I truly believe that they will be able to identify enough differentiation (possibly improvement) and efficacy to get past the FDA.
2) The real question is whether or not the products, once approved, can gain significant market share versus the parent drug, other competitors and generics. Each drug will follow a different path. Some will even enter new indication markets expanding the opportunity beyond the parent drug.
3) What I would like to propose is categorizing each KNOWN SEPR drug candidate. Please help in redefining the categories.
a) Drugs that replace a parent that will be pulled from the market due to side effects. ie) Allegra, Nori, Propulsid These producsts guarantee the absence of direct generic competitions until the SEPR patent expires.
b) Drugs that replace a parent that will have generic competition delayed for 2 or more years from SEPR product launch. This is an untested theory, but Claritan and Prozac fit the bill. How do you think these will play out.
c) Drugs where SEPR launches into a mraket that already has an established generic leader. This is XOPENEX, formeterol, etc.
d) Drugs that launch at the same time as the generic. Meridia.
I know that I have wandered a little, but these are the issues I am focussing on. The reality is that each scenario will offer a unique revenue stream and product life to SEPR.
A few other points. Why did SEPR choose now to communicate the increase in expenses and the delays in Nori and Propulsid development time. i do think that these announcements are directly related to insider selling by directors. Even so I wonder if they are sending a signal to potential partners. When i talk to IR they always indicate that other company interest in their products has never been higher. However, it has been 5 months since the prozac deal. I wonder if a little bit of Liar's poker is going on here. SEPR may be sending a message to potential partners that they are prepared to develop the drugs themselve. On the other hand I may be totally off base.
Enjoy.
HPPOLK |
