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

To: nigel bates who wrote (4447)	8/10/2001 3:19:37 PM
From: scaram(o)uche	Respond to of 52153

Nigel..... you've heard the term "epigenetic". I'm not going to pretend that I'm the correct person to describe what's going on, but here's some stuff -- with a timely twist -- that could provide insights/leads....... Curr Opin Cell Biol 2001 Jun;13(3):263-73 Histone methylation versus histone acetylation: new insights into epigenetic regulation. Rice JC, Allis CD. Department of Biochemistry and Molecular Genetics, University of Virginia, Health Sciences Center, Box 800733 Jordan Hall, Room 6222, Charlottesville, VA 22908-0733, USA. Post-translational addition of methyl groups to the amino-terminal tails of histone proteins was discovered more than three decades ago. Only now, however, is the biological significance of lysine and arginine methylation of histone tails being elucidated. Recent findings indicate that methylation of certain core histones is catalyzed by a family of conserved proteins known as the histone methyltransferases (HMTs). New evidence suggests that site-specific methylation, catalyzed by HMTs, is associated with various biological processes ranging from transcriptional regulation to epigenetic silencing via heterochromatin assembly. Taken together, these new findings suggest that histone methylation may provide a stable genomic imprint that may serve to regulate gene expression as well as other epigenetic phenomena. Stem Cells 2001;19(4):287-94 Imprinting in the germ line. Mann JR. Section of Mammalian Development, Division of Biology, Beckman Research Institute of the City of Hope, Duarte, California, USA. Genomic imprinting is an epigenetic system of gene regulation in mammals. It determines the parent-of-origin-dependent expression of a small number of imprinted genes during development, i.e., the maternal allele is inactive while the paternal is active, or vice versa. Imprinting is imparted in the germ line and involves differential DNA methylation such that particular DNA regions become methylated in one sex of germ line but not in the other. Inheritance of these differential egg and sperm methylation states is then transmitted to somatic cells, where they lead to differential maternal and paternal allelic activity, or monoallelic expression. Increasing evidence indicates that the inherited and stable differential allelic methylation regulates monoallelic expression by influencing the activity of gene regulatory elements-for one allele the element is switched off by methylation, while for the other the element is left potentially active by the lack of methylation. An interesting feature of the germ line is that, despite the presence of genomic imprinting, either as imprints inherited from the zygote or as new imprints imparted according to germ cell sex, imprinted genes are biallelically expressed as if imprints were not present. One explanation for this observation is that imprints have no influence over the germ cell's transcriptional machinery, i.e., imprinting may be neutralized in the germ cell lineage. This phenomenon may have a common basis with other unique features of the germ line, such as totipotency, perhaps in some unique aspect of chromatin structure.

To: nigel bates who wrote (4447)	8/11/2001 2:41:26 PM
From: Crossy	Respond to of 52153

re: QSC (Amex: Questcor) Hi Nigel & all, due to info from a friend of mine I recently took a position in Amarin Plc (AMRN) around $17. This was a drug delivery company in the past but they changed their strategy into a specialty pharma operation like BPRX, FRX and the like). The stock shot up from $2 to above $22 now. IF they execute according to plan they stated a company goal for $500m marketcap. With around 6m ADR's out that would mean a target stock price of around $80. Well all this prompted me to look at "specialty pharma" companies more. A specialty pharma company tries to obtain marketing rights (worldwide or in select countries) to drugs and substances that are too costly to market for big pharmaceuticals with their "blockbuster" strategies. Risks are reduced (by either shedding internal new compound R&D or just deemphasizing research for marketing). Initially, when a company embarks on the "specialty pharma" strategy, usually a bigger,midsize pharma company swaps an interest in the specialty pharma company for a cash infusion on terms normally considered "sweet" for original investors in the specialty pharma outfit (Elan at AMRN, Sigma Tau at QSC). The specialty pharma co. then does best to reduce the burn rate from research and concentrates on assembling a marketing & sales team. Later late stage compounds (Stage 2 or 3) are acquired from underfinanced biotech outfits, especially where trial costs are low and success rate good. Also marketing rights to undermarketed compounds in peripheral therapeutic areas of bellwether pharma companies are acquired. This provides an instand revenue stream and further reduces the burn rate. Once the company achieves break-even things do really speed up. Debt levels are reduced and imminent profitability is often around the corner. Due to the smaller market size of the specialty pharma drugs, generic producers usually consider those niche-markets as too limited to operate in, in fact shielding the operation from generics competition even after the original patents have elapsed. After succesfully attaining "beachhead" positions in market niches and profitability the specialty pharma companies can aim for bigger therapeutic areas, usually they aim for previously unmet cures in small therapeutic areas. Anyway, the success of AMRN, BPRX, FRX and many others prompted me to scan the market for more plays of this kind. The first that I found is Amex: QSC (Questcor). Sigma-Tau (big Italian pharma company) is their strategic partner. They recently obtained marketing rights to undermarketed formulations of Sigma-Tau and Avensis (HP-Gel) plus they have a promising Stage 3 trial with Ceresine. They reduced their burn rate from 15cents per quarter to 7 cents and already got product revenues of around $1m quarterly. There are around 28m shares out resulting of a marketcap of $38m. The newly acquired marketing rights could more than double their quarterly revenue level. Also, Gruntal has a "Strong Buy" out on them. IMHO, by the time they will become profitable a marketcap of around $100m looks attainable ($3-4) and if Ceresine will be a success even more could be in shore longterm (maybe $10+) Also institutionals have bought into QSC recently. DFA (Dimensional Fund Advisors) which I track to some degree are now the second biggest institutional holder of QSC shares.. rgrds CROSSY