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Biotech / Medical : SIBIA Neurosciences (SIBI) -- Ignore unavailable to you. Want to Upgrade?

To: scaram(o)uche who wrote (228)	9/21/1998 3:11:00 PM
From: Frank Stein	Read Replies (2) \| Respond to of 579

Rick: I just don't think any of there AD Stuff (AB and ACH)is very worthwhile...but I found this on Yahoo....you may be interested As a sidenote, I remember Steve Gorlin talking up NPS on cnbc a few months back....and here BVF is giving them a "wake-up call" Curran On The News: Biotech Chill- Federal Filings via Dow Jones Biotech Chill WASHINGTON (FFBN) -- Long-view investors who in today's uncertain markets can still manage to be enthralled with the lower-priced tier of biotechnology companies working on the next generation of blockbuster medical treatments may have noticed that the winds of market sentiment got a bit more chilly on Wednesday morning. That's when one of the er-known funds investing in this sector fired shots across the bows of 17 firms in which it holds major positions, telling them to carefully husband their liquidity for fear that rough seas lay ahead in raising additional capital to fund operations. Firing those shots was Biotechnology Value Fund L.P., a partnership that should be no stranger to investors who pay attention to ockholder ownership filings at the Securities and Exchange Commission. Over the past several years, it's difficult to recall any other single entity that has shown up in SEC filings as a more active and remarkably patient buyer of small cap biotech stocks. With investments spread out over a wide range of these drug development companies, the fund's strategy seems clear: diversification among a lengthy list of the best names in the sector should yield a nice payoff in the longer term, requiring only a small number of those firms to succeed in commercializing their inventions on a large scale. Given that today's biotech stalwarts such as Amgen (AMGN), Genentech (GNE) Centocor (CNTO) Immunex (IMNX), and Biogen (BGEN) were at one time all in the same boat as many of today's loss-making members of the sector, the potential investment rewards from the sector are tempting. But for the small firms that haven't yet made the leap, Biotechnology Value fund issued a fairly serious warning on Wednesday. ... the fund said that it may seek to work with management to maximize shareholder value. Rather than the er-type overtones that such language from shareholders typically might impart, Biotechnology Value Fund's urgings take a more down-to-earth form: conserve cash and don't dilute existing holders by launching new stock offerings. Specifically, the fund advised the firms to protect the value of partnering agreements that they have with larger drug firms. Typically, these arrangements involve the larger firms financing several million dollars worth of drug-specific research and development activities by the smaller firms, in exchange for the right to market new products and take big shares of the resulting revenue streams. Prudence on the expense side, BV Fund argues, is required because the external environment for small biotech companies is "undergoing change due a convergence of a depressed equity market, the possible slowing pace of corporate partnering activity and escalating cash burn rates" at many smaller firms. The result, the fund says, "could produce an industry shakeout in which financially conservative companies prosper and financially weak companies falter." Absent development deals with larger companies, small biotech firms often have few options for raising cash other than trying to sell more stock. In times of rising markets and high optimism, investment bankers have a better chance of generating some sizzle for a promising biotech firm seeking to float more stock at a good price. But as a fund spokesman told FFBN's Drug & Medical Device desk on Wednesday: "There's tremendous uncertainty in both the broader market and the biotech industry." "Equity offerings in this market would be very difficult...we don't want to see more dilution," the spokesman said. Even in the best of times, serious investors in the small cap biotech sector must maintain a high degree of patience, and often are required to wait several years for small companies to develop and commercialize new products. But that degree of patience comes more easily when robust performance in other market sectors is available to offset these riskier plays. Making any new equity offerings all the more perilous for small biotech firms is the dismal stock price performance over the last 18 months. Stock prices of small biotechs as a group are off 18% so far in 1998, following a 3.9% dip in 1997, according to indexes tracked by FFBN. In comparison, the large cap drug sector scored a 46% return last year, and is still up 21.6% this year despite the market's recent performance. Those firms receiving the wake-up call from Biotechnology Value Fund on Wednesday include: Recent Price 52-Week High OSI Pharmaceuticals (OSIP) $3-3/8 $11-7/8 NPS Pharmaceuticals (NPSP) $6-3/8 $11 Trimeris Inc. (TRMS) $6 $17 Neurogen Corp. (NRGN) $12-3/4 $28-3/4 Sibia Neurosciences (SIBI) $3-3/8 $9-1/8 Autoimmune Inc. (AIMM) $2 $4 Cima Labs (CIMA) $3 $7-1/2 Guilford Pharm. (GLFD) $11-5/8 $32 Advanced Magnetics (AVM) $6-3/4 $15 QLT Phototherapeutics(QLTIF) $13-5/8 $20-3/8 Chrysalis International(CRLS)$1-1/4 $4-1/2 Arqule Inc. (ARQL) $5 $29 Repligen Corp. (RGEN) $1-3/8 $3-1/2 Protein Polymers (PPTI) $1 $3-1/4 Cortech Inc. (CRTQ) $1/2 $7/8