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Biotech / Medical : Gliatech (GLIA) -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (1697)	8/29/2000 12:08:35 AM
From: M. P. McNamara, Jr. M.D.	Read Replies (2) \| Respond to of 2001

An Open Letter to Gliatech Management: Gentlemen: For the second time in a year the company is in crisis and shareholders are about to experience a bloodbath. The press release was vague and will contribute to the uncertainty that this stock is again embroiled in. The press release is rather oblique in it's reference to "inspectional observations contained in a Form 483 report which identified certain items pertaining to the clinical data submitted to the FDA with respect to a U.S. clinical trial of ADCON®-L." It goes on to state: "The observations contained in the report primarily focus on the recording of the data and the process Gliatech used in recording and presenting this data to the FDA." The vagueness of these statements, coupled with the withdrawl of Guilford from the proposed merger cast a chilling pall over this company and it's stock. Guilford's withdrawl implies either: 1. GLFD concluded that Gliatech had been incompletely forthcoming during the due diligence period and any trust that had formed is now gone. and/or that 2. The issues identified by the FDA are serious enough to cast significant doubt about the viability of marketing Adcon in the US (and maybe oversees as well?) The message the market is left with is that GLFD now has information that indicates that GLIA is a poor investment. Management owes a duty to it's shareholders to be completely forthcoming with facts. All the facts. NOW. I strongly urge you to issue an expanded, complete written statement detailing the FDA's concerns BEFORE THE MARKET OPENS IN THE MORNING. Additionally, have an open conference call tomorrow. The most effective form of damage control is total openness and honesty. Johnson & Johnson's handling of the Tylenol poisoning scare stands in stark contrast to the recent bumblings of Bridgestone-Firestone management. Do the right thing. You owe it to us. Sincerely, M. P. McNamara, Jr., M.D. mpm@apk.net 216-496-8681

To: Spekulatius who wrote (1697)	8/29/2000 1:54:07 AM
From: Torben Noerup Nielsen	Read Replies (1) \| Respond to of 2001

I agree it will dive on the opening. But I'm somewhat surprised that there's no significant after hours activity. The press releases also do not make sense. There has to be other reasons behind the break off. Go back several months and look at the earnings estimates for GLIA. They are beating the estimates. They are also beating the sales estimates for ADCON-L handily. Without the merger related expenses, GLIA would have been profitable in the second quarter. As far as I can tell, the total loss per share for the first 6 months is $0.01 and that is including the merger related expenses. Without those, Gliatech would now be profitable. Honestly, I don't doubt the shares will be hammered at the open. This is a bloodbath in the making. And I stand to loose some pretty substantial amounts of money. But I do not have enough information to tell why. I wonder how the shares would have fared had they not decided on the merger. Higher or lower? Does anyone have a better handle on the FDA issue? Is it just ADCON-L - bad enough - or are there problems with ADCON-A/P? I vaguely recall some reports estimate sales at $2.5M or so. Reality is close to three times that. I also recall projections of loss. But that has so far not come to pass. Take out the extraordinary expenses and Gliatech is at least break-even now. Gliatech isn't broke either. There's cash in the bank and at this burn rate, they shouldn't run out anytime soon. Next quarter will carry a charge for their build to lease facility, but that charge will be reduced if they actually use it. I'm of a mind to liquidate even though it will cost me a lot of money. I just can't help but think that I have yet to hear the real reasons behind this mess. Will it open at $15 and bounce a bit? Even dead cats do.... I'm mentally steeling myself for a $250K loss tomorrow. Those are the breaks when you play high stakes poker. Besides, nothing I can do about it so I might as well just accept it and move on. It will come close to matching my gains on Viropharma so far. Between the two, it's close to a wash. Thanks, Torben Thanks, Torben