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Biotech / Medical : Munch-a-Biotech Today -- Ignore unavailable to you. Want to Upgrade?

To: aknahow who wrote (419)	6/11/1999 3:55:00 PM
From: Biomaven	Read Replies (1) \| Respond to of 3158

george, I agree that every merger has significant costs - lawyers, accountants, investment bankers to begin with, as well as indirect costs in disruption, distraction and turnover. However I don't agree that clinging to existing projects is more of a problem after mergers - I think there is much more likely to be a fresh look at all projects and some needed housecleaning. There are often also substantial cost savings to be had in mergers. One CEO and one CFO instead of two is a significant savings in salary and options right away. Further, I just don't think a lot of these weak companies are going to have a choice. In their present form they are going to run out of cash or have recourse to toxic convertibles. If instead they consolidate and trim they at least have a chance of producing a viable company out of a bunch of non-viable ones. At very least you attract some attention and get the investment banker ears perked up, rather than just dwindling away to a forced sale of your IP like Progenitor. Further, they need to do it while they still have some cash left. It's just not business as usual for small biotechs any more - this time they are not going to be bailed out by follow-on public offerings, and few are in position to get significant up-front cash from partners. Peter