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Biotech / Medical : GENZYME - THE KING OF THE BIOTECHS -- Ignore unavailable to you. Want to Upgrade?

To: Lighthouse who wrote (309)	7/28/1998 10:45:00 AM
From: MCorbley	Read Replies (2) \| Respond to of 410

I believe that Genzyme's main earnings problem is that Seprafilm has not added $200 million to revenues as anticipated. I recently had a chance conversation with an excellent abdominal surgeon and he had not heard of Seprafilm. However, when I told him about it, he was very interested and said that he would investigate it. Perhaps surgeons are conservative as has been previously noted. Perhaps they are too busy to keep up on their reading. Perhaps they don't follow up on the long term side effects of surgery. In any case, abdominal adhesions really are a BIG problem in major surgery. They are also a fundamental problem and it is unlikely that advances in surgical technique will eliminate them. Seprafilm appears to be a solution. It could be argued that Seprafilm should be a standard tool in most abdominal procedures. It simply hasn't caught on yet.

To: Lighthouse who wrote (309)	7/29/1998 2:35:00 AM
From: Vector1	Read Replies (3) \| Respond to of 410

Lighthouse, I agree with just about everything you have said. Seprafilm has been an abysmal failure so far and the DSP purchase looks terrible. Surgeons are notoriously slow to adopt to changes. They spend years leaning particular ways of doing things and are reluctant to change. Genzyme is learning this in spades. The sad part is that Seprafilm works and is a quality product. It has been adopted by the Cleveland Clinic for abdominal surgery which is one of the countries outstanding hospitals.In the long term I think the product will garner sales but never enough to justify the DSP acquisition and the money spent developing Seprafilm. The therapuedic side is another story. If you look back at analyst reports 2 years ago Cederzyme has done far better than anyone expected and RenaGel and Thyrogen have the potential to add significantly to the bottom line. I think your Thyrogen projections are slightly high (I am at 35-50m 3 years out) but I think you are low on RenaGel (I think the product has $200m potential 3 years out). As someone else corectly mentioned the company benefits on the tax side from GENZL's obscene losses (another effective surgical product whose adoption rate sucks). however even adusting for the tax diffential GENZ is the cheapest biotech around and a great value given the growth prospects. Moreover the company has a war chest of almost $500m in cash for aquisitions. I have modeled 1.44 for this year, $1.80 for 99 and $2.10-2.15 for 2000. If Seprafilm starts to kick in and RenaGel and Thyrogen are approved as expected then this could easily be a $50+ stock in 18 months. V1