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

To: Pseudo Biologist who wrote (139)	10/19/1999 1:54:00 PM
From: scaram(o)uche	Respond to of 438

Yes, sorry, O'Reilly et al. Again, great page.

To: Pseudo Biologist who wrote (139)	10/19/1999 3:12:00 PM
From: jeffbas	Read Replies (2) \| Respond to of 438

In my opinion, the ONLY Science paper as far as GZMO is concerned is the aaATIII paper. I am interested in Rick's enthusiasm in that what I have seen in the press about it suggests that performance of the molecule is similar to AS/ES except that lower dosages are required to achieve the effect. I would like to make a few observations about GENZ and GZMO. I have followed ThermoElectron which is also up in the Boston area for 20 years and am convinced more than ever now that this is the model that GENZ is following - separate the children from the parent (GENZ uses tracking stock, TMO used separate companies) and help them succeed with all the power of the parent company. I know next to nothing about molecular biology science but I can figure out many ways that GZMO is a better third tier biotech investment IN THE LONG RUN than almost any other third tier: -GENZ arranged financing, like $60 million at 40% above the market price. Another third tier would have announced a secondary at $8 1/2, got it done at $7, paid 8.5% in underwriter commissions and expenses, and realized $6.41. GZMO did this at $4 1/2! Note the conservatism of the company in raising more money than they need now. They are hunting elephants and if they have success a million or two shares extra at what will prove to be low prices will be insignificant. Furthermore, this gives them the financial flexibility to be in the market for complementary technology. -Science expansion. The ThermoElectron model was to use its resources to buy companies that no "child" could possibly afford, and split them up to the subsidiaries as they fit their business models. This enabled the "children" to achieve market size far more rapidly than they could have on their own. The Cell Genesys piece that GZMO got is a perfect example of this. In my opinion, this is vastly more important in biotech -- for if you can develop a large enough research operation, the law of averages should take over and you should eventually have product results, and no longer be third tier. -Collaborations. GZMO got aaATIII because of GENZ. Period. I will bet that they have gotten and will get more because of that connection, expanding their research operation, with the benefits discussed in the preceding paragraph. -Scientific talent. If you are a hot shot young research scientist, don't you pick the small companies going somewhere (for the options) or the research teams with stature (that may be working with such a company). Therefore, I would conclude that GZMO is well-positioned here as well. -General mgmt. I have spoken with Gail Maderis and found her very impressive. You don't think that GENZ gives a company like GZMO to a second rater do you. A bigger company has talent and knows who it is. I'll take a Harvard MBA over any scientist/engineer in running a technology company -- having had too many bad experiences with engineers running traditional tech companies. -Board of Directors. Traditionally, in small companies, the Board does not exercise independent oversight of management, typically being filled with management, founders or local business folks in the case of banks and those kind of companies. Here you get the Board of a much larger company. -Other specific resources. Because of the GENZ relationship, GZMO is in my opinion probably in far better shape than any peer of its size, including ENMD, in terms of trial construction and execution, manufacturing, patent and other legal issues, sales and marketing, FDA relationships, etc. I suspect, but would leave it to someone more expert to comment, that this expertise could knock real time off the period from the beginning of trials to widespread use of a successful product AND increase the chances of success. I would appreciate any comments on this non-biological assessment of the company.