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.

Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Libbyt who wrote (40262)	5/19/2003 8:20:26 PM
From: tuck	Respond to of 57110

Hi, Libby, REGN's TRAP program looks promising, but it is early yet. The last 10-Q says they have sufficient funds for at least the end of 2004. PI data on the VEGF trap will be in by then, but I would not expect it to move the stock much. That means REGN is many years away from commercializing it; maybe '06 or '07 if they are lucky (i.e. clinical development goes so well they can file early a la MLNM's Velcade). In the meantime, their obesity drug Axokine seems to be undergoing subset analysis, and the antibody response to that drug is still also a cloud. They have $200 million in converts out that cost ~$13 million per year, with a conversion price of $30.25, so that will likely remain as debt. They had to issue over 7 million new shares to NVS per their IL-1 Trap deal, the shares calculated as function of price during the Axokine flop a month ago. In the long term, there is much of their Trap program left to partner, and favorable early clinical results (which will dribble out every few months) could presage some upside. However, today's bounce is an overreaction, IMO. I'm not saying short it, but that strategy could work here. I remain interested, but the Trap program pay off is not for a while, while near & intermediate term development risk (Axokine) and financial risk (converts, NVS overhang, burn rate) makes me want to wait and watch at least till summer. I would guess it would be a couple of bucks cheaper by then. The SI thread on REGN is very good. Miljenko is one of our best biofreaks and follows the company very closely. He's forgotten more biotech and REGN stuff than I ever knew (if he contradicts anything I've said, believe him). Worth keeping up on if you're interested. Cheers, Tuck