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

To: Ed Ajootian who wrote (2504)	4/21/1999 10:34:00 PM
From: Art Vandelay AIA	Read Replies (1) \| Respond to of 10280

Reply to Ed... First, please explain to me how "SEPR's drug development is taking a lot slower than initially predicted, with the only exception being Claritin II (DCL)." The Xopenex approval (not the labeling, the preliminary approval) came earlier than expected. R-fluoxetine trials are going at a far faster pace than had ever been envisioned. Propulsid went from off the list to the fast track in an FDA warning minute. SEPR has put at least 6 drugs on the plate for this year to begin clinical trials. They raised the money with the convertibles to pay for all of the new development. They continue to patent isomers of metabolites and other new substances when most had written off the window as being closed. They are the most active company with regards to international patent applications (see Rupeh's post of about 4 months ago). In short, I fail to see how development is slow. Are you referring to the FDA taking until the last day to approve Xopenex's labelling when SEPR read into the early approval that they would get a fast labelling, too? If so, I think that's naive. Second, if you want a money machine, try writing covered SEPR calls. The premiums are ludicrous (unless you're incredibly bullish, like most on this thread). For example, write a covered July 90 call for 18.5 (bid). Pretty low risk that we're below 90 in July, but I acknowledge some. With today's close of 98, that's 10.5 profit (10.5%) for 2.9 months. Annualize that, throw in a few commissions, and you're still over 40%. Get more aggressive and assume SEPR is flat, instead of losing 8% in that same 2.9 months, and your profit just gets bigger. Third, as for the FTC, I ask you this: do you know who picks up the tab on all the monies spent on development of r-fluoxetine if the FTC nixes the Lilly deal? A clue - not us. One pretty nice scenario I can paint is SEPR going it alone without having to pay for those 300 studies, then reaping some great rewards when they introduce a better version of the biggest selling antidepressant of all time. I think the technical definition of that is called having your cake and eating it too. By the way, though it goes counter to this point, the patent on racemic fluoxetine is now 6 months longer than previously thought, thus giving us more time to wash the old version out of prescribing doctors' minds (small pun intended). Fourth, as for the value of Xopenex, we'll see. Many are waiting with baited breath. I, for one, believe that the added usage for prevention of attacks will dramatically increase market size. As for "not as good as they have claimed," I don't see it. Please illuminate me. At the end of the day, if you choose not to ride this train, I wish you luck and I hope you at least enjoy watching all of us as we all gradly write huge tax payments to the government for our mammoth capital gains. And to those who were waiting, I didn't complete the study of the effect of the FDA letters on stock prices over time because I think that this issue has been appreciated and understood for what it is.

To: Ed Ajootian who wrote (2504)	4/22/1999 12:05:00 AM
From: AgFinder	Read Replies (2) \| Respond to of 10280

Waxman, the FTC, the USPTO and the FDA... Lately, the reasons that Sepracor has been suffering, are almost comic. First Waxman, worrying about high drug prices, has the FTC look into "competitive" concerns within the drug industry, when it is the USPTO, who guarantees the "inventor" a monpoly market by granting patents. It is this which leads to innovation that has made this economy so strong. Along comes the FDA, which understandably needs to ensure the safety and efficacy of drugs, takes all the time in the world after the trials are done and product approvable, and asserts even more regulatory control, costing the drug industry ever higher expenses for each product. Perhaps Waxman should look more closely at the FDA instead ? In any event, if people had a direct hand in choice of medecine, free market competition would ensure that pricing was as reasonable as it could be, considering the level of regulation. Dr. David Kessler, the last FDA commissioner, is missed. As a pediatrican, he tried to encourage the development of more pediatric labeling. He also helped to speed up and improve the regulatory process. Waxman is simply catering to a price issue of the public. FTC is only investigating. Allegra may be up in the air with the interference issue, but lets face it, it works. My worst case for Sepracor is that it just becomes a super-generic drug company. My best case goes way beyond Daves model. AgFinder.