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

To: scaram(o)uche who wrote (8334)	5/12/2003 10:11:15 AM
From: Biomaven	Read Replies (1) \| Respond to of 52153

Let me add to Rick's discussion about how we should view the busted converts in Erik's list. First, I think the "correct" list is somewhere in between Erik's two lists. The tech value should be adjusted for the market value of the converts, not their face value. If you look at SEPR as an example, the company can always buy back the debt at a modest premium to its current price. Second, there has been a misguided notion that the busted convert holders are somehow "in control" of the company. (You saw this a lot with SEPR near its lows). Nothing can be further from the truth. The Common shareholders are in control, and if they decide to go to Las Vegas with the company's cash (or equivalently simply fund large clinical trials <g>), there is nothing that the convert holders can do about it. If they get lucky (whether at Las Vegas or at the FDA) the common get the upside; if they get unlucky they share the downside with the convert holders. So either approach (taking debt at market value, or discounting it because of the Las Vegas effect), suggests that something in between these two lists is correct. Peter

To: scaram(o)uche who wrote (8334)	5/12/2003 12:03:41 PM
From: rkrw	Read Replies (1) \| Respond to of 52153

<<do we have any big supporters of VICL or TKTX who could update us?>> TKT ceo thankfully stepped down, replaced by Michael Astrue who is a breath of fresh air and so far is saying all the right things, cutting waste and focusing the company. It'll take time, but I think tkt is firmly heading in the right direction. <<A reminder...... biotech investing is like waiting at a bus stop. If one bargain passes by, just wait. There will be another soon.>> Words of wisdom.