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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: dazzled who wrote (9554)	2/2/1999 9:32:00 PM
From: Casaubon	Read Replies (1) \| Respond to of 14162

dazzled, yes, I already own the stock and, you correctly surmised that I am trying to time an entry into writing covered calls. I am expecting some upside momentum prior to FDA announcement for new drug approval (NDA). By the way, the FDA has awarded fast track status to this drug, and therefore MUST give a recommendation (yea or nea) within 180 calendar days of the october filing of the IND (essentially an application to the FDA to review a potential drug). You are also correct about the number of protease inhibitors, however, the real market is essentially split between crixivan (merck) and viracept (agouron). Between the two, there is at least $1 billion in sales! The market is expanding. Not everyone who should be on these great drugs are currently receiving treatment. And, the complicated drug regimens, which usually includes at least two other drugs taken at various times during the day, have strict dietary requirements. Vertex has a true BID drug (the longer 1/2 life of the drug allows a more convenient twice a day dosing, without dietary restriction) and taken in combination with abacavir (glaxo's new RT inhibitor) shows very potent antiviral efficacy. Also, the Vertex drug will be co-marketed by Glaxo, a powerhouse in the field of HIV treatment. As I stated earlier, Vertex will be receiving a royalty payment, not based on profits, but rather sales of the drug! Do not misunderstand me, the protease market will be fragmented but, Vertex should generate plenty enough income from sales of agenerase, as well as income from corporate collaborations, to sail smoothly through their many clinical trials. Later this year, data is due from the clinic on at least four drugs in phase II trials. Disease areas include: cancer multi-drug resistance (MDR, for treating cancers which have become resistant to traditional therapies; a very problematic tenacious occurrence among many cancers), nerve regeneration (currently being evaluated in the clinic for treating diabetic neuropathies; nerve damage associated with diabetes, a frequent and painful result of this common disease. There are many other potential applications for this class of drugs, which are currently being evaluated), treatment for autoimmune disease via regulation of the T-cell response (currently being evaluated for treating severe psoriasis as well as hepatitis C). Other clinical trials include, a two novel anti-inflamatory/cell regulation drugs (which interfere with the mechanism of inflammation instead of just treating the pain response). Most of these projects have corporate partnerships shouldering a large portion of the clinical trial expenses (and thus Vertex will receive royalty payments for any successful drug candidates). There are very large potential rewards for a patient and wise investor here. The company has over $250 million in cash, to pay for all their trials, and many long term share holders in management, with very little debt load!