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

To: Vector1 who wrote (5180)	12/19/2001 11:31:39 PM
From: Vector1	Read Replies (1) \| Respond to of 52153

Some interesting comentary. We are all speculating. By Tom Locke Of DOW JONES NEWSWIRES DENVER (Dow Jones)--Kos Pharmaceuticals Inc. (KOSP) shares were down 10% Wednesday, the second day of a two-day drop since the Miami company announced that it would be marketing its new Advicor cholesterol drug on its own, with some help from a third-party contract sales organization. After the announcement Tuesday morning, the stock fell Tuesday and Wednesday because investors are worried that the company, which has been losing money, will be hard-pressed financially to launch Advicor without a major partner, said Ulysses Yannas, an analyst with Buckman Buckman & Reid. S.G. Cowen Securities analyst Stephen Scala also said the stock drop might have been due to anticipation from the Street that Kos would have a partner in marketing the drug. He stressed that he was speculating that that was the driving factor in the stock drop. A spokeswoman for Kos declined to comment on the stock drop. Kos also said in the announcement Tuesday that it had received final approval from the Food and Drug Administration for marketing Advicor and that it had reached an agreement with Bristol-Myers Squibb Co. (BMY) for a $45 million payment to Kos in connection with the termination of the co-promotion arrangement for Advicor. When Bristol-Myers bought Dupont Pharmaceuticals Co. in October, it inherited the Advicor co-marketing arrangement that Kos had entered into with Dupont Pharmaceuticals in May 2000. Yannas said that neither Bristol-Myers nor Kos was comfortable with the inherited arrangement because Bristol-Myers has a competing cholesterol drug. Under the old deal, Dupont Pharmaceuticals was to provide 300 salespeople Kos was comfortable with the inherited arrangement because Bristol-Myers has a competing cholesterol drug. Under the old deal, Dupont Pharmaceuticals was to provide 300 salespeople and Kos was to provide 300 salespeople to market Advicor, Yannas said. Under Kos's new plan, it will provide its own 300 salespeople and a contract sales organization will devote 150 salespeople to Advicor, he said. Yannas sees the Tuesday announcement as a positive partly because Bristol-Myers will be paying Kos $45 million, he said, which is more than he was expecting. Under the former deal, it was supposed to contribute $22 million by the end of the year. Plus, with Bristol-Myers out of the picture, Kos will get 100% of the proceeds from Advicor, he said. It's possible that the drug, which lowers low-density, bad cholesterol and increases high-density, good cholesterol, could reach sales of $1 billion a year in five years, Yannas said. Yannas is confident Kos founder Michael Jaharis will prop up Kos financially if necessary. Plus, the company has filed a shelf equity registration and he believes it will launch a secondary equity offering at some point.

To: Vector1 who wrote (5180)	12/20/2001 1:10:14 PM
From: scaram(o)uche	Read Replies (2) \| Respond to of 52153

>> I think there is a nice niche for a niacin/statin combo. << Niche? "Good" cholesterol is the whole story. From the published information that I've reviewed, this looks like leverage with the sound underpin of Niaspan alone. I don't get it. Michael, why would you short a company with a market cap of 600M, sales annualized forward at 100M, 92% margin for existing products, and a new product coming that could be best-in-class addressing $10 billion? Why shouldn't it close at $100/share tomorrow? I must be missing something, but I've never followed the statin market. So..... please forgive my stance if naive, and TIA for any comments.