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Biotech / Medical : Munch-a-Biotech Today -- Ignore unavailable to you. Want to Upgrade?

To: scaram(o)uche who wrote (114)	1/28/1999 3:15:00 PM
From: Biomaven	Read Replies (1) \| Respond to of 3158

Sure has been a big day for a lot of biotechs. After reading the latest NEJM abstract on Enbril this morning I gave in and bought a (very) few shares of IMNX when it opened lower today. It's now behaving like a .com - currently up over 12 points. SEPR's been very strong as well, but ain't nothing seems to want to move my PCYC. Peter

To: scaram(o)uche who wrote (114)	1/29/1999 3:45:00 AM
From: scaram(o)uche	Read Replies (2) \| Respond to of 3158

Given that I've been riding calls, I don't care. ;-) I'd like to clarify that I also tucked away some shares of SNAP, a long time ago, as a potential "keep forever" investment. I don't want to seem flippant.... I suggested them as a munch-a-biotech candidate because I believe that they are transitioning to a more flexible business plan and that they combine good science with good management. The history of biotech........ some companies got stuck with business plans that somewhat handcuffed them. Deals were structured differently that they are now. Suffice it to say that the SNAP stars were tied to modest royalties for potential blockbuster projects. But, the quality and focus of the work have kept the plan alive, and now the potential revenue streams seem (1) not so far away, and (2) a bit more numerous. This company is one interesting project away from breaking loose from the pack, IMO. On the downside, the collaborations have matured and some partner revenues will be missing. It will be interesting to watch this transition period. Cash is not a problem, and I believe that the patent portfolio alone, in the context of the infrastructure that Mullinex has assembled, is worth the current research premium. That's what has happened during this "first-tier, the product is everything" market that we've been in. Great companies, really good little companies with strong patent portfolios are left stranded from the optimism. The huge discrepancy in market caps between first and third tiers is, in part, a reflection of a fire sale on patents. And that really ticks me off. Third-tier is going to rally. It will rally partly on the "filter-down" from the success of the INCY business plan to date. Pharma is evolving.... companies are shooting for smaller percentages of larger markets. It will appear increasingly attractive to big companies to have 2% revenue streams from a variety of "other guy's" drugs. Many of the tools to do such, and lots of products that will address those fragmented markets, are down in the second- and third-tiers. They are dirt cheap, on a relative basis, to pharma and first-tier. What's the advantage to being a public company if the public won't realize that patents count in this business? But, bigger companies are going to see that some compelling weight could be thrown around if those patents were in-hand. We will see a sudden transition from M&A activity based on accretive earnings to one based on a grab for intellectual property and thus the "right" to advance toward molecular medicine on a broad front. There will be good bids. The world will be correct again. Good third-tier companies will thrive. Unfortunately, some of the bad ones are still around, and they'll get bid up too. If you are versed in intellectual property law, you are not in danger of being unemployed, for some time to come. V1 recently asked me about my wild trading ways, that it seemed inconsistent with my stated intent to find a basket of potential big-baggers, early, and to stay on top of them. I sat here, most of '98, with BTRN, SIBI and stuff like that in a "seriously committed to the companies" basket. I am a relatively conservative investor. Wish I wasn't, because the annualized profit in the small, trading portion of the portfolio is damn good. Second- and third-tier....... the land forgotten among AMGN/BGEN and "gee whiz" (GERN, ENMD).