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

To: Arthur Radley who wrote (5487)	1/19/2002 1:29:59 PM
From: scott_jiminez	Read Replies (1) \| Respond to of 52153

<< AND IT IS SEVERE>> The unmistakable lesson of this post-tech/BT-bubble era is that this sort of white-collar profound deception is far from uncommon. And the entire biotech arena, an industry based almost entirely on the prospect for future earnings, is a veritable landfill of image projection and promises of future Shangri-Las. In the current environment, with the SEC and other agencies likely to significantly reduce the chasm between image and reality, the idea that the entire sector could witness a substantial reduction in valuation is evolving from a possibility to a probability. In fact, the probability that we are about to witness a surprising number of apparently healthy BTs crumble (to reveal the rotten house of cards that they are) has just increased significantly as well. To be associated with an industry where image and promises - as opposed to tangible products with proven histories - are the principle products of the majority of companies, is a lousy space to be in at this point in time...and for the foreseeable future. I'm concerned that the BTs will be one group faring the worst under the degree of scrutiny to be implemented following Enron and in the direct wake of IMCL. Just my opinion.

To: Arthur Radley who wrote (5487)	1/19/2002 2:07:48 PM
From: IRWIN JAMES FRANKEL	Read Replies (3) \| Respond to of 52153

TexasDude, Barron's has a copy of the RTF letter. That is OLD news. The Cancer letter produced that weeks ago and many of us read it at that time. Even before that the CC on the RTF letter raised enough issues in my mind that I called for IMCL to move to 20-35 and posted that view. Well, Friday it blew out the bottom of that range. You and others are suggesting legal action by BMY against IMCL, it's officers and even tendering shareholders. IMO, those suggestions are not supported by information available or rational considerations or extensions. Litigation generally does not create value. It does transfer value (always to the lawyers) and net of expenses at times to the winner. But litigation can also be a major destroyer of value. IMCL now carries a market cap of about $1.4 billion and about $500 million in cash. That stands in stark contrast to the $1.2 billion that BMY has already paid to acquire 40% of profits and 20% of the common of IMCL. The costs of litigation, direct and indirect, would not create value for BMY. The best course for them is to work with IMCL management to create value and participate in it. Perhaps, in the current distress, management of IMCL would even allow BMY to increase their ownership. Some have compared IMCL to ENE. The declines are comparable at this point. But the businesses are very different in nature. The difference in the nature of the businesses will dictate the outcome. ENE had a huge [in terms of instrument value] trading business which relied on the trust of counterparties to make trading possible. Once ENE was no longer trusted to be a counterparty collapse was probable. (I made that call when ENE was about 12.) IMCL has FDA hurdles ahead but those are manageable, provided the drug works. Does C225 work? If so, IMCL will recover. ij Disclosure: I bought IMCL Friday at 18+