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Biotech / Medical : Lidak Pharm. [LDAKA] -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (847)	1/15/1998 4:22:00 PM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 1115

Most recent article from Bloomberg with my emphasis in bold: Lidak Receives Financing Proposal From HealthMed (Update1) (Adds analyst's comments beginning in fourth paragraph, adds terms of agreement in eighth paragraph and updates stock activity in last paragraph.) La Jolla, California, Jan. 15 (Bloomberg) -- Lidak Pharmaceuticals, which has been seeking a marketing partner for its new herpes drug, received a financing offer of $80 million to $130 million from HealthMed Inc. to help distribute and sell the anti-herpes treatment. Lidak announced Dec. 31 that Bristol-Myers Squibb Co. canceled its license to market Lidak's anti-herpes drug, Lidakol. The drug is now facing U.S. Food and Drug Administration review for marketing approval. HealthMed's plan, which is being considered by a Lidak board committee, is intended to hasten certain development projects and assist in the marketing and distribution of Lidakol. Closely held HealthMed, based in Santa Monica, California, is affiliated with several large health companies. ''It's hard to get a partner after a retreat like that from a big pharmaceutical (company),'' said Stephen Flaks, chief executive of Flaks Partners LP, which manages $55 million in biotechnology stocks. ''HealthMed must think they have something.'' HealthMed's proposal calls for the acquisition of Lidak's voting stock, meaning HealthMed, acting as trustee, would gain voting rights, while shareholders of money-losing Lidak would keep the right to future earnings or dividends. HealthMed also intends to restructure Lidak's board. ''We are very fortunate to be able to create this new partnership,'' Lidak Chief Executive and President David Katz said in a statement. Katz sold about 30 percent of his stake in La Jolla, California-based Lidak to HealthMed and agreed to put the rest of his holdings in a voting trust with HealthMed as trustee. If approved, HealthMed's investment would be allocated in three stages, with the second phase conditional upon FDA approval of Lidakol, and the third based on progress in current development programs, as well as Lidakol's sales. ''That basically says nothing,'' Flaks said. ''Everyone wants to make an investment after FDA approval. It's not exactly a risk.'' Flaks points to Wall Street's lack of reaction to the financing offer as a signal to La Jolla, California-based Lidak that it will take more than a new partner to renew enthusiasm for Lidakol. ''If Wall Street believed (Lidakol) was moving along, Lidak's stock would have had a more significant move,'' Flaks said. ''The attitude at this point is 'show me.'''