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

To: tommysdad who wrote (304)	11/8/1999 2:03:00 AM
From: Dan Gibbs	Read Replies (1) \| Respond to of 372

It's great to get some input from a chemist. Frankly, I would be tickled if 10% of new drugs each year used peptide building blocks. NZYM has positioned itself as a preferred provider for several pharmaceutical companies and while there is competition, I think the company will get a large share of the business for new drugs using amino acids, especially the highly modified synthetic amino acids. As you say, it won't take many of these to create some significant "base hits" if not home runs for NZYM.

To: tommysdad who wrote (304)	9/25/2000 9:23:22 PM
From: tuck	Read Replies (2) \| Respond to of 372

tommysdad, Dan, Wilder, and whoever else, The delay in NZYM's responding to my previously noted concerns about their markets was not due to inattention on their part. The person in charge of fielding the more technical investor inquiries was away on business. I've had a bit of a dialog with NZYM today, and have been told I can share the essential points. To give the context in one place, please bear with my reposting TD's comments that got me started on this one more time: He wrote: >>Of the 27 NCEs introduced last year (1998), two had amino-acid building blocks, both synthetic. Interestingly, both are anti-thrombotics (clopidogrel {Plavix, Iscover} from Sanofi and tirofiban {Aggrastat} from Merck). All but one of these (formavirsen {Vitravene} from ISIS) are small molecules. Source: "Annual Reports in Medicinal Chemistry, Vol. 34". Frankly, I don't see that ratio changing all that much going forward. Of compounds that I know of that are in development at various companies, less than 10% would use an amino acid building block. Just about the first thing any medicinal chemist does when he finds an amino acid moiety in a lead compound is to change it to something else. Just look at the HIV protease inhibitors: by and large, their PK and PD parameters are terrible. If people weren't dying every day from this disease, most of those compounds would not have made it to the clinic. Although Synthetech makes some nice research tools, I don't see them hitting a lot of home runs in the manufacturing arena. But then, they really only need a few base hits to make it, so it's possible.<< NZYM responded by saying that while they do address a niche market, focusing on one year of product launches probably gives a skewed view of the market for peptide-based drugs. They believe the potential pipeline to be a bit richer than the less than 10% that TD suggested. The company went on to say that combinatorial chemistry is founded on "multi-functional amino acids." So medicinal chemists are also trying synthetic amino acids in analogs of peptide and peptidomimetic small molecule candidates. NZYM suggested that genomics based drug discovery could well result in the flow of more peptide and protein based compounds into development. It is even possible that amino acid derivatives could be used as chiral building blocks in compounds that don't approximate a peptide much at all. NZYM's salad days of the late 90s came from large batches of amino acid derivatives for two small molecule drugs. Those projects took a couple of years to develop to that point. This is the nature of their game, as all of us who have researched the company know. I'm no medicinal chemist, but I feel a little better about the current situation, having been told the above, & considering that today's action has brought NZYM's share price close to book value again. Unless someone more expert can plausibly dispute the above, I would think that NZYM has a viable business, and that a bottom is here or near. I believe Dan mentioned that NZYM is trying to be more proactive in searching the biotech universe for folks who could use their products, rather than waiting for hits on the product page of their website or for the phone to ring. So perhaps their business model is improving, too. Comments welcome. Cheers, Tuck