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

To: Pancho Villa who wrote (918)	12/1/1997 10:08:00 PM
From: WeirdPro Randy	Respond to of 1359

Pancho : >>could you please elaborate on your take on the potential and/or probable liabilty facing IPIC? Please read my previous posts as if anything the evidence that has developed since I started posting further supports my points. [Also read the Barrons piece again if you did not]<< I expected you would avoid this question, and your previous posts do not answer this either. If your reply is simply to read the Barron's article, then that also speaks for itself.

To: Pancho Villa who wrote (918)	12/2/1997 7:35:00 AM
From: Banjoman	Respond to of 1359

>> Please read my previous posts as if anything the evidence that has developed since I started posting further supports my points. [Also read the Barrons piece again if you did not] << Pancho: I also think that the evidence in the news articles so far available are pretty weak (w/r/t Redux), with the exception of the Mayo Clinic report at the Cancun conference. The earlier reports had so few Redux cases that conclusions about Redux were impossible. I think it is likely that IPIC will end up with no liability, on the following basis: 1) Significant probability that Redux will not be found to cause the valve problems based on: long-period of use in Europe without reported problems; small studies of short-term users in US (up to 6 mos) showed no problem (as reported in WSJ); Redux was only on market in US a short-time before withdrawal; Note that the Cancun study undermines this. Even though Neuro determined that the incidence of problems with Redux was less than for other drugs tested, it was still substantially higher than control incidence. If the echo readers were properly blinded, I see no reason for this difference. On the other hand, the 13% incidence of 40 patients (taking Redux alone) means that 5 patients were found to have valve problems - a pretty small number. And these patients, though matched in height/weight could well be different in other ways (diet/lifestyle) from the drug group since they were matched afterwards, and we know they were different in that they were willing to try a drug to reduce their obesity. 2) The limited evidence I have seen suggests that IPIC's liability would be limited even if Redux does cause valve problems. Because: AHP, not IPIC, sold the drug; the recall was immediately on learning of the possibility of valve problems; limited evidence suggests the valve problems may be reversible. I am also comforted by Neuro's investigation and the report from Lehman, since I am confident that both parties did due diligence with attorneys (I have not done so myself). On the other hand, I recognize that these types of suits may have tremendous costs in management time and legal expenses even if no real liability exists, and that settlements may be large even if no real liability exists. So I think there are risks here, as well. To determine if IPIC is a good value, one must figure its value ignoring the Redux issues, and then haircut them (by either increasing discount rates, or based on probability of occurence). I figure that IPIC is worth $30/share ignoring IPIC. If we assume that IPIC is worth $0 if the legal menace pans out, the current market price indicates a 60% chance of IPIC being liable. Based on the information I have, I think that the real probability is lower and IPIC is undervalued.

To: Pancho Villa who wrote (918)	12/2/1997 9:05:00 AM
From: Trey Yon	Read Replies (1) \| Respond to of 1359

Pancho, Your short position is turning against you. With all your replies on the thread you've let it become a personal crusade. If you may recall, I advised you to cover over a month ago in the $10 range. The Money article and the upcoming NDA filing are events that will weigh against your position in Dec. as well as a Y/E rally and by the looks of things the market is really going to get into the Christmas Punch Bowl. In case you didn't notice your fellow compadre's have begun to cover. IPIC short interest declined 12.4% as of Nov. 14 Markets ebb & flow, The tide is clearly turning against you, Time to get long.

To: Pancho Villa who wrote (918)	12/3/1997 6:05:00 PM
From: Pancho Villa	Respond to of 1359

Covered half of my short position today at 11 11/16. As you may recall from a previous post this chunk I shorted at 12 1/4. Next I present the rationale for my action. If you are not interested just skip the the next post. I am presenting it as IMO some people may learn something about some of the things you need to worry about when shorting a stock. I covered half of my position because even though I believe the coming earnings announcement* may [will?] pull the price down I am very concerned about the [possible unfounded] risk of having the company spin off its ITRC shares to shareholders [yes, I know Neuro has assured the group this is not going to happen but I still have my doubts. I am not a letter writer I am an investor using real $$$ not monopoly money]. *IMO it ain't gonna be a rosy quarter due to: 1. redux subtantial recall charges, 2. lack of [significant] redux revenue; 3. high transaction costs on the Transcell deal, 4. lawyer fees; 5. last but not least, a possible additional drain in cash from the company buying its own shares...[IMO not a very responsible way using a valuable resource] In any event, I am holding down to half my position which as you may recall I shorted at 13 7/16 as the spin off may not materialize, and even if it were announced [and it were to go unnoticed by the lawyers], this would be a clear indication the company is very concerned about the law suits. Under this scenario, I would have to come up with about 0.1 shares of ITRC for each share of IPIC I am short [This is about $2.25/share which based on todays price]. However this is a risk worth taking as IMO the price will probably then head in right direction [for Pancho]. Pancho PS: recall that as most stuff posted in SI, this is just my humble opinion on actions management may take and it is not based in any facts. To those of you worried about poor Pancho losing money on IPIC please notice that on the "first round" I have made money [a fairly nice annualized return] whitout facing much risk [this short is part of a hedged position] and I still continue to believe that the medium term upside risk is not that great. I guess that unless IPIC was bought on the recent deep most longs [unfortunatelly] are lossing money on this puppy.