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Gold/Mining/Energy : Inflazyme Pharmaceuticals (T.IZP) -- Ignore unavailable to you. Want to Upgrade?

To: Chuca Marsh who wrote (1176)	2/10/1999 2:44:00 PM
From: Ron Kertesz	Read Replies (3) \| Respond to of 1501

Hello All, I just got off the phone with Jeff Bacha (spelling?) at Inflazyme and have some more details about this agreement. It's an okay agreement but I think the news release makes it sound much better than it is. This is not a license agreement, it is an option agreement (I suspected this from reading the news release carefully). Inflazyme is responsible for the development of both IPL576 and Hoechst's compound H1/NK1 through to the end of Phase IIa clinical trials at which point Hoechst has the option to exercise a license on the compounds. Inflazyme will be responsible for the cost of development of these until that time. To cover the costs they are getting $1 million in cash and an equity investment of $15 million. The equity investment is in the form of preferred shares which are convertible to common shares at Inflazyme's discretion and at the current market price at the time of conversion. To me this is like a convertible debenture. Good if conversion is at a higher price than today's but not so good if the share price is low when they convert. Decide for yourself what it all means for the company. IMHO it's okay because they are financing the development of these compounds when market conditions are not favourable to a public offering and if the human trials are successful then they are assured of a license deal for the compounds. But then again, there are no gaurantees that the drugs will be safe and efficacious in humans. Ron