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Microcap & Penny Stocks : NEOTHERAPEUTICS (NEOT) (NEOTW) -- Ignore unavailable to you. Want to Upgrade?

To: David M. Evans who wrote (416)	5/26/1998 12:07:00 AM
From: Joe Bz	Read Replies (2) \| Respond to of 705

I encourage everyone to read the complete clarification. There is a lot more in there than just the test results. The clarification states that NEOT has an agreement with a Europeon manufacturer to make the drug during the development stage. In the original announcement they said that "The company has a contract with a large European pharmaceutical company, which Glasky wouldn't name, to produce the treatment on a large scale should the Food and Drug administration eventually give the go-ahead for its commercial use." There is a significant difference in the implications of these two statements. The original statement gave me the impression that NEOT may have a deep pocketed partner. The clarification tells me this relationship may be nothing more than a vendor relationship. The original release said "In April, the company said it received a $15 million equity-based credit line from an institutional investor to fund testing of AIT-082." Now it is saying it has a $15 million equity investment from a private investor. I am not certain what is going on here. Originally, I thought perhaps some large fund was investing in NEOT or maybe they had a line of credit established some place. The line of credit thought did not seem plausible considering their financial status and their developmental stage status. Now the institutional investor has become a private investor. This is a significant difference to me. I think we may be looking at some dilution here, but I am not sure. If there is dilution from additional equity investment than that is not good for the stock price. Finally, the original announcement said "Glasky on Wednesday told Dow Jones Newswires that the financing was sufficient to meet all the company's needs through FDA approval of AIT-082 for commercial use." But the clarification contradicts that and states "However, in order to complete the additional trials needed to obtain FDA approval for AIT-082 in Alzheimer's disease, substantial additional financing will be necessary." I wonder what more it will cost to get the drug ready for commercial use. I have a real problem believing that Glasky understands what he is talking about or that he knows his business and what is going on in his business. The FDA has warned him in the past about some of his public statements. I think Glasky was hyping the company. It also appears that there may be some nervous people at NEOT trying to cover their asses. These are the things that concern me the most. I do not think this stock will do well in the near term and shorted it on Friday.