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Biotech / Medical : ARIAD Pharmaceuticals -- Ignore unavailable to you. Want to Upgrade?

To: Mike McFarland who wrote (361)	11/12/1998 11:44:00 AM
From: scaram(o)uche	Read Replies (1) \| Respond to of 4474

>> Oh well, I guess they needed the money << Berger is known for asking for a lot (too much?) from potential partners. He did such when funding was plentiful, and now his shareholders suffer. The Board, composed largely of academics and a bunch of Rolodex Guys, has proven to be one of biotech's worst. Time to start making some noise.

To: Mike McFarland who wrote (361)	11/12/1998 11:54:00 AM
From: Rudy Saucillo	Read Replies (1) \| Respond to of 4474

Thanks, Mike. The news is clearly not encouraging. Very high burn rate and apparently no ARGENT or inflammation partnership is in sight. Why hasn't Ariad been able to land a new partnership??? These private placements really have to stop. I particularly liked Harvey's comment: "We are pleased to welcome a prominent group of new institutional investors in ARIAD." Yes, I'm sure! Rudy

To: Mike McFarland who wrote (361)	11/13/1998 11:41:00 AM
From: Biomaven	Read Replies (1) \| Respond to of 4474

Mike, So, how many shares of the common do you get for exchanging a share of the convertible? It's not a fixed number. Basically, the "investors" get to convert $5m into as many shares of ARIAD as they can get based on the 4 lowest bid prices in the 22 days preceding the conversion. At least they don't get to convert at a discount, as is sometimes the case. This is an open invitation for them to short the stock into the ground in the period preceding the conversion, so as to get as many shares as possible. Sometimes the terms prohibit shorting, but usually not. Either the company is very naive, or they desperately needed the money at any cost. I can't understand why reputable companies like this don't do a rights offering instead. That way at least only shareholders that don't put up money get diluted. I like the science here, but I'm pretty firm on staying out of companies that have floorless convertibles like this one. Peter

To: Mike McFarland who wrote (361)	12/7/1998 3:24:00 PM
From: Czechsinthemail	Read Replies (1) \| Respond to of 4474

The floorless convertible looks like a bad news story. It seems to be an indication that the company is in fairly dire straits if they need to put a floorless conversion provision in the financing deal -- either that or they have financially naive management or management looking to accumulate lots of shares on the cheap when the stock price dives due to the floorless conversion -- neither of which seems a particularly attractive alternative. My guess is that the company is being overwhelmed by its current cash requirements and simply isn't getting enough cash coming in through milestones or new partnering agreements to meet it. Apart from a major blockbuster announcement, it is hard to see what will keep the stock from being undermined by short selling. Anyone seeing silver linings? Baird