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

To: RWReeves who wrote (338)	12/11/1999 11:04:00 PM
From: Miljenko Zuanic	Read Replies (1) \| Respond to of 3557

However, Market seems unsure because of stumbles and long duration burn without payoff. ...Correct, and not correct. In 96 it was be lucky or not lucky event to determine future. If things did worked differently, REGN will today be cash positive and WS darling. I am sure you will find dozen examples for been lucky and opposite. Also, REGN burn rate for last 5-10 years is at bottom among bts. Going forward they secure nice R&D and other cash flow from partners. Again, among bts higher value of the bucks flow into company. This has been formula for low priced acquisition death for many bts. ....Don't count on that for REGN. They are not for sale. Period. Building a plant is imo not the greatest idea- there are many toll manufacturers with so much excess capacity they will almost make your first lot for free. Very expensive to build and maintain plant when all you need are clinical size lots.WFI system alone can run a million bucks. ...Are we talking about Advil/Tylenol or Aspirin active ingredient, or bio-product? The rule big pharma taught me is that mature manufacturing cost is 2% of sales for synthesis based drugs, a bit more for fermented, so not much value of vertical integration in that area unless your contract manufacturer is not to good, (say GLIA might agree or you rely a lot on trade secret process protection. ...What is manufacturing cost for PI (AGPH or MRK)? Or some other complex small molecules? What is mc for Rituxan? Herceptin?... Why they are spending big bucks on new capacity if there are excess capacity? RWR, do your homework! I wonder if your experience is different. My beloved Cetus started down the road to financial suicide by spending 60 million they could not afford on a plant. ...Do not know for Cetus story. Probably there is more Cetus stories, as well. MRK commitment is for 6 years (and they already contribute 40 MM in plant validation and upgrade, again why this bucks spent at bt instead at home) and additional contracts are possible once you have FDA license and trust. Basic research not something investment dollars are eager to fund, they belive it belongs in academia; demanded returns of 30% can't afford to wait too long for payoff. This is obviously why our beloved bts seem cheap to pharma compared to risk adjusted spend. ...If story is deferent I will put my money on CD and spent my time on something more productive. It is the point that investment dollars are hungry for quick and secure return, ~ 30% annually (and to lazy to do research for bigger return), so we have plenty of time for good strategy and in-depth analysis. Will you invest (or trade) in REGN if it jumped 400% on Monday?