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Biotech / Medical : T/FIF Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: jayhawk969 who wrote (36)	8/23/1998 1:45:00 PM
From: scaram(o)uche	Read Replies (2) \| Respond to of 1073

J.D.: A template would be biting off a bit much. I always find that it's best not to overwhelm the contact. It's always nice to try to move from IR to another contact..... perhaps the CFO or a scientist or ??. This takes time and trust. I always emphasize that I'm interested in being a potentially supportive shareholder, that I only expect public information, and that I will always accept "no comment" as a valid answer. I'd float..... (1) Can you give me evidence indicative of the scientific excellence of your research staff? CVs? How do you attract and retain top scientists? Who are your latest Ph.D.-level hires, when were they hired, and what are their backgrounds? Stuff like that. This sort of question will give you a feel for the "agressiveness" of the company..... their capacity and desire to compete. [a well-known biotech has been unable to retain immunologists. Three Director-level immunologists were hired in succession, and all three ended up telling management that they were full of it. Instead of changing direction, management stopped hiring immunologists. The company has failed to thrive] (2) What technologies do you have in-place that make your drug discovery process competitive? [KDUS will describe Axiom's stuff, release shown below. I'd ask for a simple english description of how HTS differs from HT-PS. Sounds like BS to me, so it's important to try to "hear" if the explanation is being delivered by a BS artist. NPSP seems to have strength in pharmaceutical chemistry, so they might emphasize such. It would be nice to know something about their capacity for chemical screening.... maybe Miljenko Zuanic or Peter Suzman know something about their capacities in this area, as I know that they've been eyeballing the company] (3) Are you infringing any patents in the course of your drug discovery process? This question is particularly relevant, from what I can see, for these two companies. There's this tangled mess of OSIP/ABSC/SIBI/KDUS patents, suits and licenses [they'll invariably come back at you with BS about their own issued patents. This often doesn't count for squat.... it gives them the right to practice certain procedures, but those procedures often do not exist in a vacuum. You'll probably get little of value from asking this question at KDUS, but you might strike gold at NPSP] Stuff like that. It's primarily useful just to open a decent communication channel, and to get a feel for the company's BS comfort level. For example, Levin, the ex-CEO of KDUS, was one of my least favorite biotech executives. We want to find people like Johnson/Nichols of Agouron.... straight scoop types that give you an honest feel for frustrations and morale. That's where, IMO, the real money is made. Please note that, while I respect certain scientists at each of the companies, I do not have such contacts with any of the companies in T/FIF. Going to get some, however. :-) Please also note that I focus more on infrastructure than on products, particularly when we're talking companies with sufficient cash and low price:book. Why? Because companies with exciting product potential and good management generally build and maintain a forward-looking infrastructure. If morale is strong and new hires are both experienced and motivated, I'm interested. This strategy has not been a good one in the past ten months. I hope that its time has again rolled around. Thanks for volunteering. Here's the Axiom release (snipped)..... Cadus Announces Second $2.0 Million Equity Investment in Axiom Biotechnologies Following Receipt of Axiom's First High- Throughput Pharmacology System Tarrytown, NY, June 2, 1998 -- Cadus Pharmaceutical Corporation (Nasdaq:KDUS) announced today that it has received and accepted Axiom Biotechnologies' first High-Throughput Pharmacology System (HT-PS(tm)). As a result, Cadus will purchase an additional $2.0 million of preferred stock in Axiom. In May 1997, Cadus purchased $2.0 million of preferred stock in Axiom, and agreed that, if Axiom delivered and Cadus accepted the first HT-PS(tm) system within one year, Cadus would purchase an additional $2.0 million of preferred stock in Axiom. When Cadus completes its second investment in Axiom, it will own approximately 30% of Axiom on an as-converted basis, after taking into account a recent investment by JAFCO Co., Ltd., an affiliate of the Nomura Group. Philip N. Sussman, Cadus's Senior Vice President of Corporate Development and David R. Webb, Ph.D., Cadus's Vice President of Research and Chief Scientific Officer both serve on Axiom's Board of Directors. "We are very pleased to have received Axiom's first High Throughput Pharmacology System and to have been able to support the company's growth through a strategic investment," said Mr. Sussman of Cadus. "We believe that Axiom's HT-PS(tm) will be of great use to Cadus and should prove to be an important tool for other biotechnology and pharmaceutical companies." Axiom's HT-PS(tm) is designed to relieve one of the major bottlenecks emerging in current drug discovery practice. With the advances in both high throughput screening and combinatorial chemistry, pharmaceutical companies can now routinely screen more than 100,000 compounds per assay per week. As a result of running multiple assays concurrently, and even with "hit" rates of less than 0.1%, these companies can be faced with hundreds of compounds that then require further analysis. By measuring immediate physiological responses of natural or genetically engineered human cells, the HT-PS(tm) automates the slow, labor-intensive and costly process of assessing the pharmacological properties of potential therapeutic compounds identified through primary screening. (snip) Rick