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Biotech / Medical : Aurora Biosciences (ABSC) -- Ignore unavailable to you. Want to Upgrade?

To: Richard Haugland who wrote (54)	2/2/1998 6:21:00 PM
From: Boyce Burge	Respond to of 359

Aurora is still waiting for its reward. This recent excerpt fron the WSJ (19th of Jan I think) suggests where it may go in the long run. Biotech analysis has so little credibility, and is so corrupt, that it will take a while for fund managers to recognize quality and growth, and for the righteous are rewarded... and ABSC will be among the righteous.... WSJ about the H&Q health-care conference. "In most cases, investors liked small-cap stocks that would prove vital to large pharmaceuticals companies that are expected to be on a huge quest for new drugs in coming years to maintain double-digit growth rates. "Unlike a few years ago, when investors were looking at companies developing drugs purely, now investors are looking for a lot more information companies that aren't developing drugs, but aid in developing drugs cheaper and faster," said Dennis Purcell, head of health-care investment banking at H&Q. Some of the most popular companies presenting at the conference are involved in the new field of "functional genomics," the inelegant term for companies using huge volumes of newly identified genetic data to test how new drugs or therapies will alter the genes. Several investors cited !!! Incyte Pharmaceuticals, ArQule and Aurora !!! as their top picks for companies specializing in various phases of such drug discovery. Gary Gratny of Whelan & Gratny Capital Management lamented missing Incyte's move to $43 from around $20 a year ago, but others likened Incyte to Cisco Systems, a steady-growing stock that is perennially accused of being overvalued."

To: Richard Haugland who wrote (54)	2/4/1998 7:46:00 AM
From: Richard Haugland	Read Replies (2) \| Respond to of 359

Lock-up period on ABSC. I was concerned about the potential for price erosion in ABSC following the end of the lock-up period in which insiders are prohibited from reselling the shares they received in the IPO (of June 19, 1997). The following is from ABSC's prospectus: Shares Eligible for Future Sale and Potential Adverse Effect on Market Price. Sales of Common Stock in the public market following this offering could adversely affect the market price of the Common Stock. Upon completion of this offering, the Company will have 15,893,814 shares of Common Stock outstanding, assuming no exercise of currently outstanding options, but including warrants to purchase an aggregate of 45,290 shares of Common Stock to be exercised upon the closing of this offering. Of these shares, the 3,000,000 shares sold in this offering (plus any additional shares sold upon exercise of the Underwriters' over-allotment option) will be freely transferable without restriction under the Securities Act of 1933, as amended (the "Securities Act"), unless they are held by "affiliates" of the Company as that term is used under the Securities Act and the regulations promulgated thereunder. Approximately 10,826,367 shares of Common Stock will be fully vested and eligible for sale under securities Act Rules 144 and 701 on the ninety-first day after the effectiveness of this offering. Stockholders of the Company, holding an aggregate of 10,762,778 of these 10,826,367 shares of Common Stock, have agreed pursuant to lock-up agreements with the Underwriters, subject to certain limited exceptions, not to sell or otherwise dispose of any of the shares held by them as of the date of this Prospectus for a period of 180 days after the date of this Prospectus without the prior written consent of Alex. Brown & Sons incorporated. At the end of such 180-day period, an additional 217,722 shares of Common Stock (plus approximately 15,985 shares issuable upon exercise of vested options) will be eligible for immediate resale, subject to compliance with Rule 144 or Rule 701. The remainder of the approximately 1,849,725 shares of Common Stock held by existing stockholders will become eligible for sale at various times over a period of two years and could be sold earlier if the holders exercise any available registration rights. The holders of 9,915,977 shares of Common Stock have the right in certain circumstances to require the Company to register their shares under the Securities Act for resale to the public beginning at the end of the 180 day lock-up period. If such holders, by exercising their demand registration rights, cause a large number of shares to be registered and sold in the public market, such sales could have an adverse effect on the market price. Although insiders are now permitted to sell their shares as indicated above, this does not seem to be a trend. IMO, that shows some confidence in the company by the major shareholders and employees. However yesterday there was a 200,000 share block sold that drove the price down to 12 3/8 from 13 and one should be on the watch for such large block trades and their depressing effect on the stock. The overall volume yesterday of abut 500,000 shares was also very large and there has been no market response to the recent earnings announcement. Note that the day the 180-day period ended (December 18-19) was when ABSC garnered several contracts and analyst support.