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Biotech / Medical : VD's Model Portfolio & Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: rkrw who wrote (5799)	10/23/1998 11:32:00 AM
From: Rocketman	Respond to of 9719

I definitely noticed the negative book value. They owe J&J a big chunk on a loan secured by the patents, with the loan due one year after filing or approval of the NDA or some such. I haven't dug the actual note up in the SEC filings (if it is there). I could see this companies technology going to J&J ultimately if they default. But if J&J pulled out of the clinicals, do they really care about the patents enough to go after them. Hell, J&J lost like $10-12M in asset value on their AMLN shares just this week. I'm not sure what happens to the loan if it takes them forever (or never) to get to the FDA. This is actually a good incentive for someone like Lilly to buy them a fire sale prices just to keep the technology out of J&J's hands. Or even a better incentive for J&J to not impede AMLN finding another partner so that they can make good on their loan, get the equity value back and if they don't think the technology is valuable, or just aren't interested in it, what does it hurt them if some other pharma gets it who can compete with Lilly in the diabetes market. Good reason to limit this play to under a thousand bucks though. Rman