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Biotech / Medical : Biotechnology Value Fund, L.P. -- Ignore unavailable to you. Want to Upgrade?

To: scaram(o)uche who wrote (231)	7/27/1998 2:47:00 PM
From: JMarcus	Respond to of 4974

Isn't the flip side to heavy shorting of stocks with a share price under $5 (in his II presentation Peter Freudenthal said institutional investors are doing this more and more) that when one of those stocks takes off on enthusiasm over an outstanding news event, the price might soar all the more as the shorts scramble for cover? There remains the general negative, however, that the downward pressure from the shortside is making it more and more difficult for the small biotech companies to attract financing on favorable terms (unless they have just released exciting news). On the brighter side, both analysts at the II forum predicted a rebound in biotech stock prices come September, when all the brokers return from summer vacation and a host of medical conferences begin spreading the latest news of pending trials.

To: scaram(o)uche who wrote (231)	7/27/1998 2:51:00 PM
From: aknahow	Read Replies (1) \| Respond to of 4974

Rick, until the cost of development goes down, coverage, price, total capitalization and other B.S. factors will rule. Without successful science a biotech will. of course, fail even with, coverage. But science alone is not enough to sustain a biotech through the many years the development process will take. Multiple deals with a multitude of devils are the price required to continue in existence. Those with coverage and a better price chart will raise capital at a lower cost. The coming, liquidations, consolidations and redeployment of funds by DuPont and Merck will, IMO, save the sector this time around but the core problem of development cost will probably not be resolved. BTW, I have purchased various tape packages in the past and I was impressed with the value of the Informed Investors Forums. The topic interest me in part that I used to work in a field where new entities were started with zero capital. This model no longer works and almost no new ones have been formed in the last 20 years, that became successful. In addition I have been told that few analyst have much interest in how a biotech company will finance itself, and that this question has never been raised in meetings but rather the company was asked if the firms could be of assistance. This shocked me as I believe that question is important in any industry but even more critical where companies can't expect to obtain routine lines of credit nor do a standard I.P.O.