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Biotech / Medical : Pharmacopeia, Inc. (ACCL) (Prev: PCOP) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Lang who wrote (54)	2/5/1998 3:52:00 PM
From: Jim Lang	Respond to of 179

All, Talked to my broker today. He found some information indicating that MSIM had revs last year of about $57M, and net earnings of about $6M. Have no idea about growth in revs or earns, or their year-end, or if acquisitions have been made subsequent to these numbers. So for 7M shares, it appears that PCOP is getting considerable earnings accretion immediately, and paying only about 2.5x revs, not bad for a software acquisition, depending upon growth of course. MSIM participates in many industries, including petrochemical, pharmaceutical and others. Its major competitor is TRPS (Tripos). The acquisition will double the float, thereby improving liquidity and narrowing the spread(for traders, anyway). Increased market cap may prove fruitful as well, bringing it onto additional institutional screens. FWIW, Jim Lang

To: Jim Lang who wrote (54)	2/6/1998 11:44:00 PM
From: dillon	Read Replies (2) \| Respond to of 179

I sold short PCOP. I tell you why PCOP will go lower. The news is: Pharmacopeia will acquire all of the outstanding stock of MSI for approximately 8.5 million shares of Pharmacopeia common stock. Pharmacopeia will acquire all of the outstanding stock of MSI for approximately 7.0 million newly-issued shares of Pharmacopeia common stock. Pharmacopeia will also convert the outstanding MSI options into Pharmacopeia options, potentially resulting in the net issuance of an additional 1.5 million new Pharmacopeia shares. Based on the $16.50 per share closing price of Pharmacopeia common stock on February 3, 1998, the transaction is valued at approximately $140 million. Why sell at 21: 1) Dilution of PCOP stock. 8.5 million share dilution. 2) If price stays at 21 the aquisition would cost PCOP shareholders $180 million! 3) Insiders sold at $15 and $18 (Lewis J. Shuster sold at $18, Chabala John sold at $18 and twice at 15 on date 11/97. 4) Merger agreement is based on a share price of $16.50. 5) From the last SEC filing of PCOP: "The Company has incurred losses since inception and, as of September 30, 1997 had an accumulated deficit of $33.3 million. The Company anticipates incurring additional losses over at least the next SEVERAL YEARS" 6) Consensus estimate for current fiscal year ( 12/98 ) : $ -0.42 per share 7) Alex Brown & Co reiterates strong buy because they are one of the underwriters of PCOP. They have a commercial interest in PCOP. Alex brown and the other two PCOP underwiters (Cowen & Co, UBS Securities) did sell at these levels. If they sell I am not going to buy.