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Biotech / Medical : ICOS Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Edscharp who wrote (681)	5/11/1999 5:59:00 PM
From: opalapril	Read Replies (4) \| Respond to of 1139

<<Xoma doesn't zoom and they may have an important product in the very near future>> Ahhh, Edward, you mention Xoma. Well, we can always hope. The differences between ICOS and XOMA are very instructive for anyone looking to invest in biotechs. Although I am long in both, comparison only serves to underscore why ICOS is such an impressive investment and Xoma is not much more than a wild gamble. • Xoma's management inspires faith in no one and has no past successes to point to. ICOS is headed by a certifiable hero of the biotech world. • Xoma's CEO, Castello, has paid himself an excessive salary ($500,000+) for years, regardless of the company's dismal performance. ICOS' Rathman is well compensated, too, but only because much of his compensation is dependent on company performance. • Xoma's cash level is so precarious that further shareholder dilution through another toxic convertible is unavoidable regardless of the results of an over-due P-3 trial results. ICOS, as mentioned earlier, is flush and, moreover, has a demonstrated ability to raise more whenever the need should arise on terms which are not unfavorable to existing shareholders . • No mutual or investment fund of any consequence has or wants a piece of Xoma. I'm not sure about a recent post's claim that 100 funds own a piece of ICOS, but I know scores of them do have substantial investments in the company. • Where ICOS enjoys significant insider ownership, Xoma board members and executives historically have invested next to nothing of their own money in the company. • ICOS corporate governance in Seattle has followed a steady and unremarkable path. Xoma had an occult, sudden lurch last winter that led the board to call an “emergency” meeting and abruptly move corporation headquarters to Bermuda -- for reasons which I am not satisfied have been fully or truthfully disclosed. • ICOS has made a superb effort to fully inform investors of present and future plans. As you well know, Edward, Xoma deliberately deceived its own shareholders about certain key aspects of the ongoing Neuprex trial. When called on it by our friends on the SI Xoma board, the company lied again and claimed the FDA made them do it (a dodge which is merely another lie). • Xoma went fishing two years ago for a large pharmaceutical partner and came up with nothing but old boots, then quietly dropped mention of the subject from its investors' FAQ. ICOS is sought after by many pharmaceuticals, but Rathman has spurned them all -- for good reason -- and said so. • Xoma's drug development pipeline is very narrow -- essentially, a roll of the dice on one recombinant molecule -– and any eventual commercial applications remain something of a cypher, one suspects, even to the company. ICOS, as mentioned, has undertaken a diverse and exiting range of projects, each with manifestly immediate and impressive commercial prospects . One last point: Xoma investors like you and me talk a lot about “the science.” But for all of the above reasons, I have grown concerned that Xoma is already suffering a serious degradation in the quality of its science staff. After all, to which would some brilliant biotech scientist with a terrific idea in her head prefer to hitch her wagon? To a well-financed research company with a wide, broad-based pipeline like that of ICOS? Or to a two-time loser like Xoma that has of necessity narrowed its commitment to a single compound in hopes it has multiple applications because if it doesn't the company will fail and everybody will lose their jobs? Needless to say, side-by-side comparison of an investment portfolio with the two stocks in them reflects these differences. In only 18 months, ICOS has risen from $13 to $43. Xoma has fallen from $5 to $3. While I admit the race isn't over until the last horse crosses the finish line, ICOS looks like a real winner; Xoma is starting to resemble a hammer-head nag.

To: Edscharp who wrote (681)	5/12/1999 6:38:00 AM
From: Robert Scott	Respond to of 1139

You may have just discovered that Bill Gates owns a big piece of the company but he's owned it for many years. More likely that: 1. Story is getting out 2. Big day for the Naz 3. Recent news of Viagra and competitors stumble To me and I'll bet most investors, it is FAR more important that Rathman is leading the company and has a very successful past doing this than Gates owning shares.

To: Edscharp who wrote (681)	5/12/1999 1:48:00 PM
From: DJ	Respond to of 1139

Bill Gates' interest in biotech is a combination of financial, intellectual, and philanthropic. He's interested in being a "technology visionary," so I see his ICOS investment and board membership as a way to learn more about this technology and the industry. Who could be a better mentor than Rathmann--who understands the science, the business, and the Washington regulatory scene and the Wall Street biotech crowd? BillG also knows that this business is likely going to do very important things in the next few decades. I see Rathmann (and Lee Hood at the University of Washington--who holds the Gates Chair) as mentors. Bottom line: I read Gates' ICOS investment as distinctly more than financial--he's interested in the science too (and also in humanitarian opportunities stemming from this industry's development). One final point: Rathmann is discussed in some detail in the book "Corporate Creativity" by Robinson and Stern--with regard to how he managed R&D at 3M (his role in the development of Scotchgard). There's no question that Rathmann is an R&D icon from which other companies, even BillG, can learn a lot.