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

To: scaram(o)uche who wrote (2373)	12/21/2000 12:05:45 PM
From: Biomaven	Read Replies (2) \| Respond to of 52153

Anyone have a good site to look at money-supply numbers? I recall in about April TSC had a chart showing how closely the NASD had tracked some version (M2 plus something?) of money supply. I'd be interested in seeing how well that relationship has held up since then. Peter

To: scaram(o)uche who wrote (2373)	12/27/2000 7:48:08 PM
From: Londo	Read Replies (1) \| Respond to of 52153

MCDE valuation response: Sorry in replying a few days late.. I haven't had the time to concentrate on a 10-K in front of the computer screen.. (they're so much easier to read on paper..) My initial post was based on a 2-minute estimate from browsing the site, and reading the basic financial statements.. so they were 'founded in little familiarity with the sector.' 1. They need cash: yup. $15M left.. what does that buy now? A Phase I clinical? They've burned 9.2 million cash for the first 9 months this year in operations, so that gives them 15 months of cash left.. selling off 10% of the company basically buys them 5 months of operations. Ugly. 2. Value of their research: Apparantly the market says its worth about $30M.. i'm inclined to agree. 3. Iconix: The 32% ownership is pretty useless unless if the company is marketable.. unfortunately, I couldn't find more than a paragraph or two about it in the 10-K.. 4. Other collaborations: Have yielded nothing close to a saleable product.. the problem here is that MCDE has to give an arm and a leg in rights in order to get anything off the ground.. their cash situation absolutely would kill them during a negotiation process. 5. Market "irrationality".. I'd be happy (as MCDE management) if the market bought out MCDE for $70 million cash.. the whole problem here is that nothing is close to getting to market. And that MCDE will need some form of external help before that happens.. its kind of a lose-lose here: if their technology was truly something, they would have been bought out earlier.. if their technology is garbage (or at least doesn't show any potential), the other companies would leave MCDE alone, and not be obliged to pay for much.. (which has been the case).. (response to your follow-up message) 6. Biotech 'value' vs. 'story'.. personally, I need to see some tangible evidence that when I buy into a biotechnology company, I'm actually buying something. (ok, rather crude statement, but it gets the point across).. usually that 'something' turns out to be a boatload of cash and accumulated research on the balance sheet.. but in the case of MCDE, there's not much there.. The reason why the stock is so low is its painfully obvious that any investors in MCDE right now will have to face at least a 25% dilution in order for the entity to exist.. when MCDE was high-flying this March and September, couldn't they have at least unloaded 2 million shares in a secondary?