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Biotech / Medical : Agouron Pharmaceuticals (AGPH) -- Ignore unavailable to you. Want to Upgrade?

To: Clive Roberts who wrote (4101)	4/17/1998 5:53:00 AM
From: per strandberg	Read Replies (2) \| Respond to of 6136

Clive, I think it was Richard Harmon who wisely stated on this thread that he was leaving AGPH as it entered a phase when the company was going to be evaluated no longer as a developing company but as a profit making money machine. I didn't know then what that would imply, but I think I have a better understanding now. 0-drug companies seem to be evaluated on future possibilities. Most of them are treated as cash-burners and the period of time they can sustain their R&D is continually watched. Most companies must also "prostitute" themselves buy making deals about future revenue. Going from 0 drugs to a 1-drug company suddenly seems to be risky and the company must therefore be punished. If it is deemed necessary to start out as a 2-drug company, there won't be many successful start-ups. But what about trying to make a fair estimate of what AGPH would be as a true single drug company, a mere sales company, selling just Viracept and licensing marketing rights to other drugs. By bringing the $32 mil R&D expenses down to 0, AGPH would then suddenly have an EPS of about $4 yearly. Clearly, the reported EPS is a balancing act between how much to report as earnings and how much to spend on R&D. In my mind, the focusing on net profit as the all-mighty magic number is not at all telling the truth. Unfortunately, the obsession with quarterly "Beating the estimates" game, particularly "surprise percentages" clouds the real issues. This is a real obstacle for companies trying to define and actively pursue longterm (more than three months) goals. The stock prices are determined by analysts with wildly differing skills and agendas. Many words to express that I still have not found any better Bio-tech to invest in, based on FA, despite the economical outcome so far. I also miss John W's optimism. Not having access to AOL, I want to thank those posters (particularly margie) who keeps us informed about what is of importance. Regards ps