Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Incyte (INCY) -- Ignore unavailable to you. Want to Upgrade?

To: Biotech Jim who wrote (1849)	11/29/2001 11:28:20 AM
From: nigel bates	Read Replies (1) \| Respond to of 3202

INCY hits back at IVGN. Curious there wasn't a PR at the time... SAN FRANCISCO, Nov. 28 – Contending patent violations, Incyte Genomics filed suit against Invitrogen on Nov. 21 in the US District Court of the Southern District of California genomeweb.com

To: Biotech Jim who wrote (1849)	12/6/2001 12:32:47 PM
From: Rocketman	Read Replies (2) \| Respond to of 3202

BJ, If INCY is ready to get back into drug development, great, the markets will love it - in theory - for the short term, but then the bills will come due and the losses will mount, and it just won't seem like such a great idea after all. But, I think that if they get this kind of effort off the books of the parent by either a spinout (maybe coupled with an acquisition), JVs, equity for providing data access to lots of companies, or some other means. INCY would do well to actually become - hold on this is a scary concept - profitable again. That's right, they were profitable once upon a time before they decided to be everything to everybody and dumped money into what now seem to have been a bunch of bad paths to pursue - business areas that seemed like you could maybe make money, but which have turned into commodity businesses with razor thin margins and expensive IP battles. This also keeps the parent company not competing with their customers. I really feel strongly that they do not want to be in a conflict of interest position with their pharma customers. By truly having a separate entity that they have equity interest in, I think they can have the best of both worlds. A historical note: INCY was founded as a drug development "pharma" company, but left that strategy after about 12-18 months when others sepsis drugs were killing patients and companies because "drug development should be left in the hands of Big Pharma" who has the resources to take the risk, and became a genomics company (before the word was coined). I don't things have changed that much, and the risks and costs of drug development are just too high to risk within the parent company. I just don't like one pony biotech development companies - I like to have a whole stable of ponies - spread the risk ala a VC. In the early days, INCY always met or exceeded the expectations that they put out to their investors, and were loved by their investors for it. That changed when they decided to let profitability go, and they paid a huge price for it. For a while they kept saying how they were just delaying profitability for a while, will be back to it next year or the one after - while the losses just kept mounting. Finally they just quit discussing that evil concept of making a profit. They have never been any good at PR, hype just isn't in their genes (unlike HGSI and Celera). I think that they need to get back to creating expectations and actually fulfilling them, and a key one would be to turn a profit as a database/information company. If INCY wants to be a drug company, then I like that virtual model, take equity in a hundred or so biotech drug devo companies in exchange for access to the databases. Spread that risk and keep the costs down. Make money on the backs of other companies through a huge stock portfolio. Their incremental costs of adding a new dbase customer is literally nothing, quit demanding cash from companies that can't afford to pay cash for data, and give it to them for a piece of stock. This makes the biotechs more valuable, which actually helps their pharma partners by making lots of biotechs with product potential that can get sucked up by acquisitions to fill their pipelines. Re: INCY getting acquired. The only way IMO that this can happen is by an non-Pharma company doing it - like a big information company. If any one of the pharmas acquired INCY, you can expect a huge amount problems and loss of customers just due to paranoia alone. INCY has the ability to know what their each and every one of their clients is interested in - info that just cannot be risked being shared with competition. INCY does not want to be that competition. INCY is as close to an industry consortium as you are going to get without actually having the pharmas get together and forming a consortium. I think it would do incredible damage to the Pharma industry as a whole for any one of them to acquire the company, and it would kill INCY in the process. There is more data here than any one company could ever exploit, there is plenty to go around for everyone, so no one should dominate control of the data - it should be there for all the companies to use. These new execs sound great, but I'm not making the leap of faith that this automatically means they are going to start developing drugs. But, top pharma guys like this sure can help make INCY closer to their pharma customers, and these sound like true operating guys, which is good. I do expect the usual December INCY rally. They never lose valuation in December, they save that for 1Q. Rocketman