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Biotech / Medical : Sepracor-Looks very promising
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To: BMcV who wrote (3060)5/27/1999 1:39:00 PM
From: jeffbas  Read Replies (3) of 10280
 
Some comments on your good post.

If SEPR were to have no blockbusters, then the current discount to a Forest Labs or a Mylan should be even larger shouldn't it since SEPR is far from being where those companies are now and I imagine (since I have not done the analysis) would be less profitable because I presume
SEPR is spending much more R&D dollars than they?

I generally agree with you on the classic textbook correction comment, which is why I have started following SEPR more closely. However, I think momentum players have caused a relatively greater degree of overvaluation nowadays than in the past. In other words, I would suggest that the first 50% decline just takes care of the overvaluation, and that we are now in the bear market phase taking the stock to undervaluation. My personal pet price for a bottom is between 45 and 50, which I pick for a reason -- there is $190 million of convertibles, convertible at $47+. If any material amount of these guys get nervous. I would think the stock might be driven to that
level, by conversions and sales.

A question for anyone on the thread who knows both companies. Someone who has worked for many years in biotech suggested I buy some VRTX and put it away. VRTX has about 1/4 the market cap of SEPR, but only about
15% of the market cap if cash is removed from both companies' market cap. Can anyone comment on the relative merits of the two -- is one clearly cheaper than the other?
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