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

To: nigel bates who wrote (4212)	6/28/2001 2:08:33 PM
From: Crossy	Read Replies (1) \| Respond to of 52153

Nigel, this is more a tax engineering strategy than an "investment" IMHO. I have very often seen companies authorizing the buyback of shares on the market in EXACTLY THE SAME AMOUNT they are issuing options to their rank & file. If the stock rises and we assume all options convert, the company gains a nice tax benefit. Plus the added benefit from reducing capital by an equal amount. I see this as normal "CFO stragegeering" nothing more or less. The funny thing is that very often the company has ultimately exactly the same amount of shares outstanding as before. Like 10 + 1 - 1 = 10. This is a very good tax management strategy that doesn't really hurt the bottom line. The rest from the newsblip "unsurpassed portfolio & pipeline of own company" I regard as PR hogwash - that's not the real issue here. Ask any CFO he will tell you the same.. rgrds CROSSY

To: nigel bates who wrote (4212)	6/28/2001 3:08:51 PM
From: aknahow	Respond to of 52153

Fits with the cash is trash theory. If you have tons of cash and can't immediately use it for research or acquisitions you have to get rid of it in the present low interest rate phase. Buying ones shares makes more sense than accepting a meager return on the investment of these funds. Should a deal come along the shares can be reissued. Am aware that in the biotech area many have done and will make share offerings. The fact that many sheep have done it makes it easier to convince the remaining sheep to follow along. XOMA could not resist the guys in expensive suits either. <g>