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

To: manny t who wrote (8876)	7/29/2003 2:03:01 PM
From: Biomaven	Read Replies (2) \| Respond to of 52153

<OSUR> I don't follow them, but in general the instant-test business is a tough one - low margins and plenty of competition. Unfortunately the FDA won't allow "do-it-yourself" HIV testing which might sell well. I also don't believe their test is approved in the US for oral samples. I believe TRIB and QDEL (as well as some bigger companies) play in the same space. I haven't looked at the space for a while, but the history has generally been one of financial underperformance relative to amount of hype. So I'd be careful. Peter

To: manny t who wrote (8876)	7/29/2003 11:55:45 PM
From: John Metcalf	Respond to of 52153

"Is this news significant for the price of this stock? The approval was received in response to an application filed by the Company's exclusive OraQuick(R) distributor in Mexico, Pro-Consulting S.A. de C.V. In addition, the approval is based on a technical evaluation of the OraQuick(R) test performed by the National Diagnostic Institute and Epidemiological Reference "INDRE", which demonstrated 100% specificity and 100% sensitivity when used on oral fluid samples." This may be significant for share price when a respectable company issues an unrespectable press release just before their earnings conference call. What's not respectable? 1) Mexico is not a huge profit-maker for a diagnostic or medicine, because the healthcare system is, well, informal. One doesn't need to see a doctor. You just go to the apocatheria, and buy what you want. Government approval is needed to do business, but it's nothing so rigorous as the FDA. 2) 100% results in any diagnostic is a big red flag. 3) Lack of scientific reportage in the release is another big red flag. How many samples were tested? Were samples confirmed by an accepted test, then tested with Ora-Quick? If so, a 100% accurate result would lack significance against the lesser reference standard. 4) Friends who do business in Mexico say that bribes are ubiquitous, but small. "Por los ninos!" I tell you this for free, but with palms upraised; please correspond privately. 5) At the current burn rate, OSUR can last 20 quarters. Would not some expectation of profit within that time frame be necessary to justify a market cap of $326mm? Is such a profit likely to come from Mexico? 6) Stock is trading near a market high. If you buy it tomorrow, will you be buying from insiders? I'm just skeptical by nature, not an expert, and have wallowed in biotech for nearly ten years.