SIBIA Neurosciences (SIBI) Message Board

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Biotech / Medical : SIBIA Neurosciences (SIBI)

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To: scaram(o)uche who wrote (370)	5/28/1999 4:37:00 PM
From: RWReeves	Read Replies (1) of 579

Richard, I see your point, of course. I've thought about it from the SIBI side of the deal (I've done the same thing in the past myself). While they've reduced their downside risk, they've significantly reduced the upside potentials as well, and in a core product area. That's not good for stockholders and I think the stock price reflects this. It seems to me that this big pharma call trend which has been moving through the industry like a wave now for some years chills biotech valuation overall. Certainly that was a key theme at this years' Wilson Sonsini conference. It used to be that common stock was the residual valuation of the company after all debtholders had been satisfied. It seems to me deals like LLY are like a secondary offering where common shareholders get muscled aside by a tracking stock-like instrument. The effect is highly dilutive. Didn't you post something to that effect on the Chiron thread a while back?

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