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Biotech / Medical : LIPO-Liposome -- Ignore unavailable to you. Want to Upgrade?

To: G-MAN who wrote (772)	8/26/1999 1:41:00 AM
From: Puck	Read Replies (3) \| Respond to of 900

In regards to: 1. Evacet's probable marketing approval (which I and others over on Yahoo believe in consensus to be no lower than 85% and probaly above 90%) is only partially reflected in the price. I (and others) believe that rev's from Evacet will be $50 mil. first year, then $100 mil. second year, $150 mil. third year etc. This market is substantial (168,000 women diagnosed with metastatic breast caner last year in the U.S.) and I believe that with eventual indication expansions for Evacet to include treatment for lymphoma (which accounts for 30% of dox. usage) its sales will eventually exceed $500 mil. annually. If Evacet is launched in the fourth quarter, inital sales will add $10 mil-$15 mil. to rev's for the quarter. I think the stock price will be above $30 on news of approval and trend into the forties next year. Early this month Ken Dart, who at one time owned 24.99% of LIPO's shares sold 800,000 beginning when the price hit $28 and on down to $26 according to his SC-13 G filings. Each of the last two days a single block trade in excess of 150,000 shares went through in after hours trading. Since he is the only beneficial owner of more than %5 of LIPO's shares, it seems to me reasonable to think that he's most likely the seller although we won't know for certain until he either files or doesn't file in the future. Could be a mutual fund or other institution but it is odd that both yesterday and today more than 20% of shares traded occured after the market closed. Incidently, in his earlier SC-13g filings, Mr. Dart discloses that he sold his shares during regular NASDAQ trading. Today, I believe that at least some of the weakness in LIPO's stock was a result of a series of biotech downgrades by Merril Lynch: Idec Pharmaceuticals, Medimmune systems, Biogen, Amgen, and Genzyme for reasons of price alone. Since those companies, aside from being in the same general field, have no similarity to LIPO's situation, I think that LIPO's price has become more attractive and as Sept. 16 approaches its stock price movements will become increasingly uncorrelated with that of the biotech indexes. (I have a long term position I took last year and a short term position that I've been accumulating here in the low twenties.) 3. Today LIPO announced that it has started a third joint clinical trial for Evacet with another compound and partner--in this case Taxol and Bristol Meyer's Squibb. Bristol Meyers, Genentech, and Rhone Poulanc (? sp.) definitely would not have already engaged Evacet in clinical trials with their own drugs pre-marketing approval if they weren't convinced that approval for Evacet was a foregone conclusion. These companies are footing the majority of the bill for these trials and are now spending millions of dollars getting them underway. They could have chosen to wait until the ODAC meeting next month or the FDA's final conclusion but decided not to. 4. Hambrecht & Quist, when last I checked, had a year end price projection of around $30. 5. Politics does manifest itself in subtle ways in the drug approval process. Regarding LIPO's situation, the politics of breast cancer will be in the minds of the FDA advisory panel when they convene to vote on Evacet. Since breast cancer is (I think) the number two killer of women and the issue is politically charged, with good reason, the FDA might feel a little bit more imperative to get a new drug that combats breast cancer in a new or better way to market. Incidently, none of the doctors or medical researches over on the Yahoo thread thinks that Evacet will be outright not approved. They think there is a slim theoretical chance that the FDA may ask for more information, which could require more trials--but this possibility seems very small indeed. By approving Evacet now, the many women would be spared heart damage from chemotherapy who otherwise wouldn't. This seems to me very significant and something LIPO demonstrated beyond a reasonable doubt.