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 : Millennium Pharmaceuticals, Inc. (MLNM) -- Ignore unavailable to you. Want to Upgrade?

To: SemiBull who wrote (1533)	5/14/2003 9:14:26 PM
From: Ian@SI	Read Replies (1) \| Respond to of 3044

Another Briefing.com comment on MLNM. Robert Green really must dislike this company. He continues to refuse to see any prospects for success by continuing to do what it seems to do best... ++++++++++++++++++++++++++ 12:58 ET ****** Ahead of the Curve: Millennium Pharmaceutical (MLNM) 14.28 +1.79 (+14%) Velcade is approved, a full month before the deadline. The stock's modest rise today suggests that the pricing for approval was already built into the price. Frankly, that makes purchase today a much better risk/reward scenario than purchase yesterday. Failure to approve Velcade would have meant a much sharper decline in the stock. What now? Velcade starts to sell on Monday. We think the "official" projection of its approved use for Myeloma of $300 million is probably too low. The reason is that while approval is limited to a specific application, once a drug is on the market, physicians can prescribe a drug for other conditions at their discretion. This means the market for an approved anti-cancer drug is probably a lot bigger than than the Myeloma market. Off-label prescriptions could more thanf double the market for Velcade. The question now becomes "what is Millenium's future?" Up until now, the company has always put forth a vision of a broad suite of drugs "in the pipeline." Now that one has finally come through, what becomes of the other drugs in the pipeline? The offical company stance has always been that everything in the pipeline will continue to be part of Millenium's strategy. But we wonder if an opposite path isn't possible? That would be the following: a) Sell Velcade strictly as a licensed product, distributed through someone else. b) Collect royalties. c) Sell off everything else in the pipeline to someone else. d) Reduce the expense structure of the company to barely nothing. e) Distribute royalty payments to shareholders. This might be too dramatic a shift for the company to take, but to us it seems like a very tempting proposition, given the prospects for Velcade sales. It is essentially the strategy that QualComm took when it went from a manufacturing company to a pure royalty company with some profits going into R&D. We will examine this more thoroughly in an upcoming Stock Brief, (even though it is admittedly somewhat low probability). Also, we still think that, ultimately, an investment in Abbott Labs (ABT) (see the Story Stock on this dated March 13, 2003) is probably just as good a bet on the future of Velcade as anything else. Someone else will distribute this drug - not Millenium. Our guess is that it will be Abbott Labs. They own 5% and have 14,000 total sales people - and they already sell oncology drugs. It is a natural fit. It is also probably the reason that Abbott bought the stock in the first place. Buying distributors instead of the development companies may be the way to play the new world of drug development. In this case, we think it is ABT instead of MLNM. Also interesting is the fact that the FDA approved this drug on the Fast Track in only four months, two months sooner than they had to act. This is a dramatic indicator of the state of mind at the FDA and it bodes well for the drug development cycle overall, particularly for Fast Track drugs. - Robert V. Green, Briefing.com