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Biotech / Medical : Pharmos (PARS) -- Ignore unavailable to you. Want to Upgrade?

To: Richard Huth who wrote (69)	11/4/1998 8:51:00 AM
From: Ariella	Read Replies (2) \| Respond to of 1386

Dear Richard, I must ask you a question. When you write the phrase <<PARS is running out of money, and this is kind of a strait-jacket.>> I believe that you believe this to be so. While a biotech has "cash burn," it is true, of course. But speed of cash burn changes and I'm wondering what it takes to change the above perception for many investors, to make them understand how far the company has actually come over the past 4 quarters. In July 1997 the company lost its CFO and operated without one till December 1997 when Bob Cook was appointed. At that point in time the best he could tell us was that the company had enough money to last 4 months. With our feet to the fire we made the infamous Castle Creek deal last February. But the man knows his stuff and is really helping PARS get on better financial footing. In yesterday's conference call he reminded us that the cash burn rate that used to be $715K a month, fell to $513K a month and is now $428K a month. Instead of 3 or 4 months' worth of cash, we now have 10 months' worth. And he's not including prepaid expenses we carry on the asset side of the balance sheet, contributions from sales of Alrex/Lotemax, upfront payments from an HU-211 partner, or $2.6 million due in milestone payments from BOL in 1999 when giving the 10-month figure. When I look at PARS, I see a biotech/emerging pharmaceutical that has turned a critical point into a revenue-producing company with plenty of irons in the fire to lift earnings dramatically in 24 months. Now, if PARS sells the 3 million common shares registered in September for $2/each, we get a little bit of dilution in return for another 14 months of living expenses to tack onto the 10-months we've already got (and still, of course, have not factored in the reality of sales of Alrex/Lotemax, maybe an $8 mill-$10 mill upfront payment from an HU-211 partner, or the $2.6 million due in milestone payments from BOL). We have in place, in other words, a game plan to fund the company to the end of the year 2000 -- just in time for an NDA for HU-211, for 3 eye drugs to be selling in domestic and foreign markets, for Tamoxifen to be in advanced clinical trials with a big pharma partner, for HU-211 to be in early trials for stroke or glaucoma, etc. Knowing this, I see a company that (managed with proper fiscal restraint) will survive to become a thriving pharmaceutical. The Wall Street community, by voting with the share price, obviously sees a company of doubtful viability. All the info I've given above is public information, included routinely in conference calls and press releases. How come Wall Street doesn't see what I see? -Ariella