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Biotech / Medical : Genzyme Tissue Repair - GZTR -- Ignore unavailable to you. Want to Upgrade?

To: KLH who wrote (193)	6/26/1999 11:06:00 AM
From: BWAC	Read Replies (1) \| Respond to of 405

K, Try not to laugh too hard when you read this following article. I can safely say it is a candidate for the understatement of the year award. ''We'll see some downward trading, no matter what,'' ???????? And so how does that help out the GENZ soon to be GZSP stockholders? ______________________________________ Friday June 25, 5:54 pm Eastern Time Genzyme Surgical could debut with a dip--president By Tony Munroe BOSTON, June 25 (Reuters) - Genzyme Corp.'s latest tracking stock hits the market on Monday, and while Genzyme Surgical's (Nasdaq:GZSP - news) president expects it to debut with a dip, he also said on Friday that Genzyme has avoided missteps that dogged earlier tracking issues. ''We'll see some downward trading, no matter what,'' said Duke Collier, president of Genzyme Surgical Products. The shares, to be distributed as dividends to owners of the flagship Genzyme General (Nasdaq:GENZ - news) stock, have an implied value of $25, Cambridge, Mass.,-based Genzyme said. Collier said in an interview the relatively small size of the $400 million capitalization, as well as the unit's narrow focus, could lead some investors to sell. But Collier also said Genzyme has learned from its previous tracking issues, Genzyme Tissue Repair (Nasdaq:GZTR - news) and Genzyme Molecular Oncology (Nasdaq:GZMO - news), which haven't won raves from investors. ''We've learned from those experiences,'' said Collier, noting that Genzyme is investing $150 million in cash to help capitalize the company. Genzyme Surgical will also assume as value the $250 million it spent to buy Deknatel Snowden Pencer Inc. in 1996, which accounted for nearly 90 percent of Genzyme Surgical's roughly $104 million in revenues in 1998. With Tissue Repair and Molecular Oncology, ''we had to go back to the market or get into financing activities that were hurtful,'' Collier said. This time, ''we have put more than ample cash out here. We are not using this as a vehicle to raise money ... we are not expecting any dilution to shareholders.'' Tracking stocks let investors focus more clearly on Genzyme's disparate product lines, the company said. Genzyme Surgical consists of the instruments company it bought in 1996, as well the firm's home-grown Seprafilm product line, intended to prevent tissue and organs from sticking together following surgery. But one key difference between flagship Genzyme General, a leading maker of treatments for rare diseases, and Genzyme Surgical, is that the former is profitable and the latter isn't, which also offers a rationale for issuing the tracking stock, an analyst said. ''It gets it off the (profit and loss)'' of Genzyme General, said ING Barings analyst Jonas Alsenas. As a bonus, Genzyme can take the loss from the tracking stock and, for tax purposes, apply it to the profitable Genzyme General, he said. Collier said he expects revenue to grow at 15 percent this year and another 20 percent in 2000, with Surgical Products turning a profit in the second half of 2001. And compared to other Genzyme tracking issues, ''this is a fairly large, fairly diverse business that we're putting out,'' said Collier, noting Genzyme Surgical has 700 employees.