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Biotech / Medical : Gliatech (GLIA) -- Ignore unavailable to you. Want to Upgrade?

To: M. P. McNamara, Jr. M.D. who wrote (431)	5/19/1998 9:43:00 PM
From: Asymmetric	Respond to of 2001

Focus on Biotechs is Intensifying. Interesting article...When the big corporations start showing an interest, and putting their money behind it, tells me whole sector is due for a big boost. Looking forward to details from annual meeting. Peter. DuPont Plans to Sell Off Conoco, Clearing Way for Biotech Growth By SUSAN WARREN May 12, 1998 Staff Reporter of THE WALL STREET JOURNAL DuPont Co. said it would shed its oil unit, Conoco Inc., and use most of the proceeds, which analysts put at about $25 billion, to invest in its growing life-sciences business. The giant Wilmington, Del., chemical company is expected to raise about $5 billion in an initial public offering in the coming months of as much as 20% of Houston-based Conoco. CEOs Speak DuPont CEO Charles Holliday and Conoco CEO Archie Dunham discuss the benefits of divesting Conoco. Charles O. Holliday, DuPont's chief executive, said at a briefing in New York that he expects to sell the remaining interest over the next few years, though he isn't certain of the timing and the approach. An outright sale of the remaining 80%, a spinoff to DuPont shareholders or another public offering all remain options, he said. The move delighted Wall Street, which for years has complained that the chemical company's ownership of an oil company was confusing to shareholders and diluted DuPont's market value. With the announcement, DuPont shares, which already had risen almost 30% this year, rose $5.4375, or 7.3%, to $79.50 in New York Stock Exchange composite trading. Conoco contributed $21 billion of DuPont's 1997 revenue of $45 billion. Expected Acquisition The sale or spinoff of Conoco is widely thought to be the prelude to a major acquisition in life sciences, which Mr. Holliday has called the centerpiece of DuPont's future. Mr. Holliday said that the lion's share of proceeds from the Conoco sale, which ultimately could bring between $20 billion and $30 billion, would go toward building the biotechnology segment. He declined to say if DuPont was mulling one sweeping transaction, or smaller, incremental additions to its portfolio. "We have a family of alternatives that are highly attractive to us, and we will pick and choose among them," he said. Monsanto Co., with a market value of about $30 billion, and Britain's Zeneca Group, with a market value estimated around $40 billion, have both been mentioned on Wall Street as acquisition targets for DuPont, or as possible partners in a giant biotechnology joint venture. Also mentioned is the possibility of DuPont bolstering its 20% stake in Pioneer Hi-Bred International Inc., though that wouldn't provide the big bang the Street is looking for. "They have the money now, and they have the vision to be a biotech company, and they have to play big," said Nnaoke Ufere, vice president of A.T. Kearney, a consulting firm. Clearly, Mr. Holliday, 50 years old, who took over as chief executive in February, hasn't wasted any time in putting his stamp on the company. In March, he reorganized the company into three parts: cyclical chemicals, specialty products such as Lycra spandex, and life sciences, which includes pharmaceuticals and bioengineered agricultural products. Selling or spinning off Conoco "allows me to focus more on life sciences," he said. Last year, the company spent more than $3 billion adding to that business, paying $1.5 billion for a division of Ralston-Purina Co. called Protein Technologies International and $1.7 billion for the stake in Pioneer Hi-Bred. No Monsanto Mr. Holliday says he isn't ready to take the kind of gamble Monsanto did recently by getting out of the chemicals business altogether. While expectations for biotechnology are high -- Mr. Holliday estimates the business will make up more than a third of DuPont's earnings in another five years, compared with about 18% now -- he said he believes shareholders appreciate the safety net provided by DuPont's proven chemical and specialty businesses. "Biotech is going to be a very strong part of our company, I just can't tell you when," he said. For Conoco, acquired by DuPont in 1981, the divestiture would allow it to gain more recognition and expand more quickly. "It's independence day," said Conoco Chief Executive Archie Dunham, who will retain his position. Mr. Dunham says he plans to expand Conoco more aggressively, especially in widening its geographical spread. "In my entire career I have never seen so many growth opportunities in the energy field," said Mr. Dunham. As an independent company, Conoco, with reserves ranking it among the top 10 publicly traded oil companies, should have more access to tap financial markets to fund its growth plans. But first, the company needs to familiarize investors with the company, which has been largely ignored, though it operated autonomously. "As a big operating company, it's not your traditional IPO," said Michael Young, an oil analyst with Deutsche Morgan Grenfell. And while the slump in oil prices led some to question the timing of Conoco's IPO, Mr. Young said the market will value Conoco based more on next year's cash-flow prospects, when oil prices are expected to improve. Though battered by lower oil prices, Conoco managed to turn in a better-than expected performance during this year's first quarter, helping to lift DuPont's earnings before charges to 92 cents a share, or two cents above expectations, with a contribution of $287 million in operating income. DuPont paid $7 billion for Conoco in 1981 in what was the largest merger of its time. In the last five years, Conoco has trimmed costs and improved its productivity to boost profits 35% and expand its reserves 56%

To: M. P. McNamara, Jr. M.D. who wrote (431)	5/20/1998 3:48:00 AM
From: Asymmetric	Read Replies (1) \| Respond to of 2001

Mac, Interesting post on Yahoo Glia board. Don't know if you'll read this by time of annual meeting, but would be nice to see if anyone can get confirmation regarding Adcon-P trials. Good luck to all. Peter. Volume and price a plus. stock_investor_glia May 19 1998 The Plain Dealer had a very interesting article regarding Gliatechs' potential second offering. The article explained why the issuance and where the funds will be distributed. This mornings' open was around 16.25 which then dropped to 15.75 on profit-taking. By noon, we were up over 17.50 to peak at 18-plus. I think as the market in general sold off; individuals took profits but several buy orders in just under 17.00. I believe we have a new wave of investors at the mid-teen range which should add significant support for the stock. Investor's Business Daily states 5 mutual companies now hold Gliatech. The Plain Dealer had a rather interesting comment which I need to verify with I.R. at Gliatech. The quote stated that Gliatech received an exemption concerning trials for Adcon-P which will move it into Phase-3 clinical trials this summer. The question is what happens to Phase-2? Adcon-P is just finishing Phase-1. Does the exemption allow a bypass of Phase-2? If so, that expedites Adcon-P's trial by at least 1 year. With the degree of finances needed to run a Phase-3 trial it explains the sudden need of additional financing. I will try to clarify this at shareholder meeting 5-20. Any input or correction would be appreciated. Good luck to all..........Go GLIA. Also, does anybody find it unusual that a Cleveland based brockerage firm handled the initial public offering just a few years ago. Now, an out of state brockerage firm handles the 2nd offering. I hope this isn't a sign of things to come. Again, any input would be appreciated.

To: M. P. McNamara, Jr. M.D. who wrote (431)	5/21/1998 10:19:00 PM
From: Asymmetric	Read Replies (1) \| Respond to of 2001

Annual Meeting Notes, (from someone who sat next to you no less, Dr McNamara! Looking forward to any notes you might care to post. These notes from AOL board. Many thanks to Spyros. Regards. Peter) Subject: May 20 Annual Meeting Date: Wed, May 20, 1998 14:35 EDT From: Spyros1950 The following is from my notes at today's stockholder meeting. 1). the meeting lasted the typical fifty minutes. 30 minutes of regular business, and 20 minutes of questions from the floor. 2). Regarding ADCON : L(umbar) and T/N (tendon) are currently selling outside the USA, P(elvic) is in clinical trials, and the last three (Abdominal, Implants, Cardiac) are under development in the Glia lab. The approval of Adcon-L will help the other adcon family members gain quicker approval IN EUROPE, but NOT in the USA . ( In the USA, the approval process will be just as thorough for each of the other family members). 3). Adcon L and T/N have now been used in over 12,000 surgeries in 29 countries. USA launch of Adcon-L is for mid 1998. The USA market penetration target for Adcon-L is for 5 to 10 % for the first 12 months. Over the next five years, the target is 35%. The overall USA market for Adcon-L is estimated to be at $200 million. In Europe, the resale rates to existing accounts are rising. In five years, competition will come into the market. Adcon is achieving 60% gross margin. The 400 patient German Study will be completed by the end of 1998. In Japan, the PMA application has been filed, and Adcon will probably be approved late 1998, or 1999 at the latest. 4). For Adcon-L, the USA target market is the surgeon ( as opposed to the hospital or patient). Independent sales agents will be used to sell to the doctors. In total there are 29 agents with 140 reps. They have targeted 2500 orthopedic and 4000 neurosurgeons as the market which should cover 85% of spinal surgeries. If a sales agent does not achieve the minimum 5% market penetration, a review will be held and appropriate actions taken. Management is not aware of any off-label usage. (Note: there are different categories of spinal surgeries. Adcon is only to be used in the Lumbar.) Glia will charge $495 per unit. (The typical spinal surgery today ranges from $8,000 to $15,000.) The product is currently manufactured in the Netherlands. A USA manufacturer will be choosen after initial sales data is reviewed. 5). Cognitive Modulation Program - Glia is concentrating on the H3 Receptor. A lead compound has be identified. GT2331 will begin human testing in 4Q 1998. 6). Alzheimer - They are close to selecting a lead compound. Once selected, human trials will begin one year later. Johnson & Johnson is their partner only in the Alzheimer product . J&J owns 3% of Glia shares. 7). Two million additional shares will be issued soon. Management expects the market capitalization to increase. 8). The Case Western suit has been completed. 9). Relocation of the company will be decided by the middle of this summer. The State of Ohio has had several talks with the company. Another meeting with them is scheduled for later today. In summary , that completes my notes. I hope that they help you. Additionally, at the meeting I sat next to Dr. Mike McNamera. You may want to check out the Silicon Invester board as he normally posts his notes there. Good Luck to all, Spyros Subject: Re: Why up on Monday Date: Wed, May 20, 1998 22:13 EDT From: Spyros1950 Mike, here are a few comments for some of your questions: 1. Recent price action - As there was a large article on Glia in Monday's local paper, The Cleveland Plain Dealer, it is "normal" to see a small run-up in price. We have seen this happen several times in the past. Perhaps the key here will be trading volume. With Monday at 205k, Tuesday at 430k, and today at 126k, then hopefully we will see another big trading volume tomorrow. If not, chalk up this week's run up to the Plain Dealer. 2. Additional shares - When asked at today's meeting about the dilution of current shares by the new additions, The CFO stated that "the company expects the MARKET CAPITALIZATION to increase". This was "strange wording" to me as it really says NOTHING because a PRICE DROP combined with the increased number of shares could still give an increased market capitalization. (My gut feel is that the CFO pulled a fast one here. The question was straight forward: What will happen to the price of the current shares? The answer came back in terms of "Market Capitalization"??????) 3. Who receives shares - only your broker or even his boss only knows. I can guarantee you that the wording will make it appear that the offering is open to all, but as I said previously that was not the case the last time. As ZVCHRIS noted earlier, we can only hope that Glia does the right thing this time around. 4. Standard of Care - With a goal of 5 to 10% market penetration for the first twelve months, and a 35% goal in five years, it may still be a little early to speak about Standard Of Care. Of course, sales could always come in above expectations, but then again the company is expecting competition in the same five year period that will hold down Glia's market share. 5. Off label use. - per the CEO today, there is no off label use. The ADCON family has six products which are each designed for a specific body area and in the USA, each product will have to be thoroughly evaluated by the FDA. (The approval of one product does not necessarily make the next evaluation any easier. In Europe YES, but in the USA NO such luck) In summary, nothing written above is carved in stone, and anything can happen. If anybody feels differently, then please share your thoughts. Through discussion, maybe we can all invest more wisely. Good Luck. Spyros Subject: Re: S-3 Date: Tue, May 19, 1998 01:48 EDT From: Spyros1950 To : ZVCHRIS I agree with your post and feel that your sales feedback will be very important to everyone on this board. Additionally, I would like to add a comment on your question of "who" will purchase these shares. The last time (1996?) Glia filed (and later withdrew) a request for a secondary offering, shares were not slated to reach the public or institutional investors. ALL the shares ( or at least the lion's part) were to go to Johnson & Johnson. ( The deal "looked" like a public offering, but J&J was going to receive the primary benefit. In a word, this transaction was an "accomodation for a friend". In another word, it was a "bad deal" for the small investor - if J&J wants to purchase shares , then let them do it on the "open" market so that the current stockholders can benefit by the increased demand. If on the otherhand, Glia REALLY (???) needed the cash, then why not let the real PUBLIC buy the shares. This deal may have been legal, but it sure stunk. It is probably also why I do not believe management when they speak today.) A funny thing happened along the way, however, the open market share price fell and Glia cancelled the offering. Of course, now two years later, we can possibly repeat history. I neither know the "selling plan" for this years offering, nor do I know how this deal will eventually work out. By posting what has happened in the past, I hope that all of us small investors may have a fairer chance to invest successfully. Until then, "be careful, its a jungle out there".. Good Luck to all, Spyros