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Biotech / Medical : Sepracor-Looks very promising -- Ignore unavailable to you. Want to Upgrade?

To: Robohogs who wrote (2162)	3/26/1999 11:32:00 PM
From: IRWIN JAMES FRANKEL	Respond to of 10280

Thanks Jonathan In fact that rings a bell from many years back. My question then is when the company reports the number of fully diluted shares, does it include those from the conv. bonds? After all, what I have been trying to get to is a good number on the shares which will be outstanding when earnings start. ij

To: Robohogs who wrote (2162)	3/27/1999 2:02:00 PM
From: Biomaven	Read Replies (1) \| Respond to of 10280

Jonathan, What you describe is correct except if the company (like SEPR) is making a loss from continuing operations. To quote directly from FAS 128 (the new standard): "... no potential common shares shall be included in the computation of any diluted per-share amount when a loss from continuing operations exists..." In fact, for convertible debt (or preferred) the test is even stricter - it is viewed as antidilutive whenever its interest per share (net of taxes) exceeds basic EPS. I sold my few call options at a reasonable gain on Friday when it became clear that the initial stock gain wasn't going to hold - I will likely re-establish the position on Monday. I think we are seeing a little "quarteritis" - analysts are cutting their very near term predictions because approval came so late. When biotechs start selling their first product analysts always have trouble adjusting, focusing even more intently on the short term. While there is some logic to this for a one-product company, the true value of SEPR is clearly not affected by whether they start selling Xopenex next month instead of three months ago, or whether they get a peds label now or in nine months time. Peter