Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : CYPB - Cypress BioScience -- Ignore unavailable to you. Want to Upgrade?

To: muddphudd who wrote (268)	6/2/1998 9:36:00 PM
From: Joel	Respond to of 586

The info below is somewhat outdated. Paramount Capital is the owner of both the domestic and offshore companies called the "Aries Funds. Dr. Rosenwald can be reached at 212/554-4300. The Aries offshore fund could be the one you are concerned with. ---------------------------------------------------------------------- The Aries Fund produced a net return of 17.1 percent in the first quarter of this year, outpacing both the Amex Biotech Index and the U.S. S&P 500, as it has consistently since its inception. The offshore fund, which focuses exclusively on the global biotechnology sector, capitalized by shorting on many institutionally owned larger cap stocks and remaining long on many micro caps. "The stock prices of larger cap names, which have already reached the commercialization stage of their drugs or technologies, tend to be driven by sales and earnings announcements," explains Lindsay A. Rosenwald, M.D., investment manager for both the Aries offshore fund and the domestic fund, which is up 193.2 percent since it began two years ago. "In general, analysts have tended to be overly optimistic about these companies' earnings forecasts, and their optimistic valuations, accelerated by institutional liquidity parameters for ownership, make them viable short candidates for the Aries portfolio." Third and fourth tier biotech stocks, on the other hand, which have not reached the commercialization stage, are not as vulnerable to market downturns. Event-driven Investments "These companies' stock prices are still event-driven," Dr. Rosenwald explains. "They're based on announcements such as clinical drug trial results, FDA approvals, corporate collaborations, and management changes." Aries's analysts, several of them full-time Ph.D.'s and M.D.'s, identify such companies by focusing much of their fundamental research on therapeutic technologies awaiting approval while under Phase III review by the FDA. Among the companies in the Aries portfolio are NeoPharm, focusing on the treatment & diagnosis of cancers; Texas Biotechnology Corp., targeting heart disease patients who are intolerant of Heparin; and Cypress Biosciences Corp., which has regained marketing rights from Baxter Labs for a device used to treat a blood disorder called ITP and severe rheumatoid arthritis.

To: muddphudd who wrote (268)	6/3/1998 12:07:00 AM
From: Jay Lowe	Respond to of 586

Joel seems to have figured this out. The company will or may need to obtain more cash in order to get to market ... that's the burn-rate concern stated earlier. The "overhang" business means that the authorized shares exceed the issued shares ... those authorized shares can enter the market any time the company wants ... via private placement is typical at this point. This is dilutive to the existing holders and, in the sense that it creates supply, may press downward on the price. The real issues are "How much more money does the company need to get to market?" and "How profitable are they at that point?" We have previously noted that the top 2 officers have compensation plans that are heavily biased toward stock ... they don't want to be diluted anymore than I do. Their goal is to trade whatever level of dilution is necessary to achieve optimum growth. Concerned? Yes. Worried? No.

To: muddphudd who wrote (268)	6/3/1998 6:12:00 PM
From: muddphudd	Read Replies (1) \| Respond to of 586

This is from the Yahoo:CYPB thread. Posted by Fred1395. Looks like he thought the comment I posted was ridiculous based on his other comments on the thread. I was just relaying info from someone else. Anyway, here it is: "CYPB'S problem is that its lacks respectability among the more prestigious investment bankers and brokers. It has not yet appeared on their screens for historical reasons relating to what occurred in the past with its founders and others, including insiders previously associated with the company and is generally viewed as low rent. The issuance of restricted shares as described is viewed as sleazy way to raise capital. While Jay and Debbie are not exactly the biggest or brightest lights in the industry they had enough sense to get rid of the founder and build on the RA results they inherited. Jay knows that sleazy ain't the way to go. His efforts are directed a achieving some measure of respect for the company because he knows FDA approval is in the bag. His hurdle is not science but reputation. Note the deft way he pushed the Allen guy to the sidelines. "