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

To: LLCF who wrote (6498)	6/7/2002 5:57:39 AM
From: Icebrg	Read Replies (1) \| Respond to of 52153

>>Oh, jeeez.... one of those?? ARIAD play?>> I don't see this as an immediate risk thanks to the company's healthy cash position. Despite what a certain analyst likes to imply. >>Zero Coupon Subordinated Exchangeable Notes Due 2018 As of December 31, 2001, Elan had $951m of 3.25% Zero Coupon Subordinated Exchangeable Notes Due 2018 (the “Notes”). The Notes are exchangeable, at the option of the holders, into Elan ADSs. The holders can also put their Notes back to Elan on each of December 14, 2003, December 14, 2008 and December 14, 2013. If put, Elan can repay a Note in cash, by the delivery of Elan ADSs, or in any combination of cash and Elan ADSs, at Elan’s option.>> So, the holder has the decision if he would like to use the put or not. But Elan may then decide if cash, stock or a combination should be used to meet the put. Ice

To: LLCF who wrote (6498)	6/7/2002 9:19:18 AM
From: Biomaven	Read Replies (2) \| Respond to of 52153

DAK, As others have said, ELN is very different from ARIAD. The big difference is that ELN has the right (but not obligation) to use cash to redeem the converts and more importantly, has the cash to use if it wants. So this is NOT a toxic convertible, where the holder can freely short ahead of the conversion without any risk. However, in the current environment and with Maris renewing his old attack, ELN will likely continue weak. The BGEN news is not going to help the sector either, and PFE returning pagoclone to Indevus today is yet another blow. So valuations may be ridiculous, but it looks like they will be getting more ridiculous. Peter