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To: icecreambug who wrote (468)	6/15/1999 8:24:00 PM
From: xcr600	Respond to of 1438

Zeev is one of the classiest people on SI, not to mention the resident junk equity expert. I believe he generally doesn't short a company, but instead follows them to see how the stock reacts with the type of financing they receive. Maybe you should listen to him. btw, POS meter now on high alert. x

To: icecreambug who wrote (468)	6/15/1999 8:25:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 1438

Dongsoo, it is clear that NTEC will not see profit any time soon, so their current valuation of $100 MM is all based on "promises" of their developing and their partners developing successful products within the next 18 months or so. If they do not, the $20 MM in cash left after the payment of the $9 MM or so in bonds debt, should suffice. The complex carbohydrate for otitis media, if it works, has the potential of becoming a block buster drug, the problem is quite severe and getting more and more immune to normal antibiotic products. I do not know what J&J is working on, possibly new implantable materials that are biosorbable (for various ligation clips, staples and even anchors for reconstructive surgery). That is dwarfed, IMHO to the potential of the otitis media drug. If you feel certain that within two years they can start marketing this product in Europe and Asia (and two years later in the US, and hopefully, under cooperative agreement with one of the biggies with marketing muscles), paying a capitalization of $100 MM is not outrageous. How confident are you that the otitis drug will succeed? I have not followed NTEC, but from the little I could find, that is all can say at this time. Do you know how good their hold on the general technology of synthesis of complex carbohydrates is? Do they have competitors? They had Cytel, but they bought this one apparently (or at least their relevant technologies). They do not have "funny" financing, their cash is clean, and while they have to hold $20 MM in reserve against their debt of $9 MM, they may have few other cash injections like the recent injection from J&J. I presume that the J&J $4 MM is not counted in the May quarterly, so that add at least another quarter of cash burn (g) to the 18 months I mentioned above. Zeev