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

To: dillon who wrote (58)	2/8/1998 1:05:00 AM
From: Dr. Voodoo	Read Replies (1) \| Respond to of 179

Do you know how much in $ MSI figures into the balance sheet? I thought they had significant revenues.

To: dillon who wrote (58)	2/9/1998 6:57:00 PM
From: Susan Rodney	Read Replies (1) \| Respond to of 179

Dillon, I'd like to elaborate on some of your comments and correct some inaccuracies: You said Why sell at 21: 1) Dilution of PCOP stock. 8.5 million share dilution. This acquisition is expected to be accretive to shareholders, NOT DILUTIVE. Previous estimates of ($0.50) and $0.02 for 1998 and 1999, respectively, are now ($0.01) and $0.45. These projections represent a significant improvement in operating performance. 2) If price stays at 21 the acquisition would cost PCOP shareholders $180 million! If the stock remains at $21 (although today it closed at $19.69), the purchase price will indeed be somewhere around $180 million. This price of approximately 3X 1997 revenues still compares favorably to the market cap/revenues of a group of comparable companies which is 5.1 times revenues and the prices of a group of recent similar acquisitions which is 4.2 times revenues. So we think we actually will pay a very fair price for MSI. 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. I believe it was actually back in 11/96 that these sales took place, not 1997. Lew sold a small amount for personal reasons and Jack retired and decided to take some profits. Both men still own a considerable amount of stock and/or options. 4) Merger agreement is based on a share price of $16.50. I'm not sure what your point was here. 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" Clearly based on my answer is #1 above, this statement will no longer be true once this acquisition is consummated. 6) Consensus estimate for current fiscal year ( 12/98 ) : $ -0.42 per share Again, based on my answer to #1 above, this clearly will no longer be true. 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. The underwriters didn't sell stock. They simply acted as a broker between Pharmacopeia and the investment community. Also, please consider Lehman Brothers, Everen Securities and OrbiMed partners. Each firm has a buy recommendation on Pharmacopeia and has no current "commercial interest" in PCOP. Hope this helps. Sue